Resale market finally shakes off ABSD
Preliminary
price indices for completed non-landed properties released last week
suggest that the resale market for private apartments has finally shaken
off the dampening effects of the additional buyer's stamp duty (ABSD)
imposed last December.
The National University of Singapore's flash Singapore Residential Price Index for last month inched up 0.8 per cent, the second consecutive monthly rise following a more modest 0.4 per cent rise in March.
Unlike the market for new homes which not only rebounded fairly quickly but grew in strength, the resale market had tanked in February - a result of the shock therapy induced by the ABSD.
But now the estimates for last month show that the market's improvement was real. The sub-index for the central region was up 1.6 per cent, while that for the non-central region was unchanged. The finalised numbers could be better.
While the sub-index for small units registered a slide of 1.2 per cent in April, this had come after the scintillating rise of 2.7 per cent in March.
The higher volatility exhibited by this sub-index may be because of the smaller numbers of completed units in this category. In any case, the net price gain over the two months since February is still a significant 1.5 per cent.
With the resale market's recovery, both the market for new and resale homes have finally shaken off the effects of the ABSD - it took just a month for the new home market and three months for the resale market. There are already reports of more high-valued resale homes being transacted recently.
If the effects of the ABSD are now limited in determining future sales and price trends, what can we expect from policymakers now?
The market has been dominated by talk of more cooling measures, especially for shoebox properties.
Small sized apartments have their place in the market but it becomes a big problem when such small sizes become the norm. Today, about half of new units sold are of sizes below 800 sq ft.
There are huge unquantifiable social costs - on the family unit, population fertility rates and psychological stress, just to name a few.
A whole year of small apartment sales is alright, but not when this stretches to two or three years or even more.
When developers were focused on building and selling prime apartments for huge profits between 2006 and 2008, the supply of suburban homes dropped significantly. This led to a huge pent-up demand for suburban mass market properties.
Besides possible curbs on shoebox units, there is also market talk that the authorities may want to tame the significant uptick in new home sales.
Some analysts have pointed to the recent Hougang by-election result that they viewed as an affirmation by Singaporeans that there should be no let-up in cooling measures in the private housing market.
Source: Today – 8 June 2012
The National University of Singapore's flash Singapore Residential Price Index for last month inched up 0.8 per cent, the second consecutive monthly rise following a more modest 0.4 per cent rise in March.
Unlike the market for new homes which not only rebounded fairly quickly but grew in strength, the resale market had tanked in February - a result of the shock therapy induced by the ABSD.
But now the estimates for last month show that the market's improvement was real. The sub-index for the central region was up 1.6 per cent, while that for the non-central region was unchanged. The finalised numbers could be better.
While the sub-index for small units registered a slide of 1.2 per cent in April, this had come after the scintillating rise of 2.7 per cent in March.
The higher volatility exhibited by this sub-index may be because of the smaller numbers of completed units in this category. In any case, the net price gain over the two months since February is still a significant 1.5 per cent.
With the resale market's recovery, both the market for new and resale homes have finally shaken off the effects of the ABSD - it took just a month for the new home market and three months for the resale market. There are already reports of more high-valued resale homes being transacted recently.
If the effects of the ABSD are now limited in determining future sales and price trends, what can we expect from policymakers now?
The market has been dominated by talk of more cooling measures, especially for shoebox properties.
Small sized apartments have their place in the market but it becomes a big problem when such small sizes become the norm. Today, about half of new units sold are of sizes below 800 sq ft.
There are huge unquantifiable social costs - on the family unit, population fertility rates and psychological stress, just to name a few.
A whole year of small apartment sales is alright, but not when this stretches to two or three years or even more.
When developers were focused on building and selling prime apartments for huge profits between 2006 and 2008, the supply of suburban homes dropped significantly. This led to a huge pent-up demand for suburban mass market properties.
Besides possible curbs on shoebox units, there is also market talk that the authorities may want to tame the significant uptick in new home sales.
Some analysts have pointed to the recent Hougang by-election result that they viewed as an affirmation by Singaporeans that there should be no let-up in cooling measures in the private housing market.
Source: Today – 8 June 2012
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