Rise in private, HDB resale transactions

Rise in private, HDB resale transactions

More buyers have snapped up resale Housing Board flats and condo units in the second quarter even as prices have reached record highs. Experts said this marks a reversal in the resale market that had seen a downward trend in transaction volume in previous quarters.

They added that reasons ranged from pent-up demand, to lower cash premiums asked by sellers of HDB flats. On the private-property front, the 3,487 resale transactions in the second quarter, up from 2,206 in the first, represented a rise of close to 60per cent.

HDB resale deals rose 19 per cent to 7,011 from 5,892.

ERA Realty key executive officer Eugene Lim noted that buyers who are not going for expensive, new, top-end condo units in the suburban areas are instead turning to the core central area and 'finding good bargains'.
Citing an example, he said an 800sqft apartment at the 99-year-leasehold Watertown in Punggol recently sold for $1.1 million. By comparison, a similar-sized apartment at the freehold Levelz in Farrer Road went for about $1.2 million.

There were 701 transactions in the city centre in the second quarter, compared to 376 in the first.
Private non-landed home prices in the city centre and city fringe inched up 0.6 per cent and 0.4 per cent respectively, reversing a dip of 0.6 per cent in both segments in the previous quarter.
In suburban areas, it rose 0.5 per cent, down from a 1.1 per cent gain.

Overall, private homes increased by 0.4 per cent, compared to a decrease of 0.1 per cent in the previous quarter.

COVs are cash premiums paid above a flat's valuation. Based on data from various agencies, the estimated overall COV median is $26,000 so far this year, compared to about $34,000 in the fourth quarter of last year.

Mr Lim said those opting to buy resale flats also do not need to wait three years for new flats to be built. 'And if they are second-timers, it might be more worth their while to pay the COV than the resale levy,' he added.
The resale levy that a buyer going for his second subsidised flat must pay ranges from $15,000 to $50,000.
Despite the flurry of resale activity, experts are predicting that growth will be gradual for both the HDB and private segments, in part due to the big supply of new homes in the pipeline.

Source: The Straits Times – 28 July 2012