Sales volume in both the primary and secondary markets declined in Q3, with primary home sales registering a larger quarter-on-quarter (q-o-q) fall of 52.8%. Secondary home sales (comprising both resales and sub-sales) fell by a smaller 34.6% q-o-q but dipped below 2,000 units in Q3 2013 for the first quarter since Q1 2009. With falling transaction volume, sellers in the secondary market now have comparatively less bargaining power.
Private home purchases by all buyer groups saw double-digit q-o-q declines after the Total Debt Servicing Ratio (TDSR) framework was implemented at theend of Q2. Notwithstanding, foreign demand showed more resilience, with a smaller q-o-q and year-on-year (y-o-y) fall in Q3 and for the first nine months of 2013 respectively, compared to purchases by Singaporeans and Singapore Permanent Residents (SPRs).
Even though purchases across most non-Singaporean buyer groups fell in Q3, purchases by US buyers have remained relatively resilient. Their private home purchases in Q3 were similar to that in Q2, and their purchases in Q1-Q3 2013 have already exceeded the purchases made in the same period last year.
Of the 368 shoebox units that were sold in Q3, a record high of 73% were located Outside the Central Region (OCR). Notably, about 61% of all shoebox sales in Q3 were in the price range of $1,500 - $2,000 per sq ft, compared to only 29% and 33% respectively in Q2 and Q1.
The earlier cooling measures, coupled with the TDSR framework, have jammed the brakes on transaction volume in the residential property market. Buyers will be more selective given that it is now harder to obtain loans to finance their property purchases. This is especially so for multiple-property owners who will also have to pay higher Additional Buyer’s Stamp Duty (ABSD). Notwithstanding, projects which offer better value or are more competitively priced will likely still enjoy comparatively healthy demand.
Source : DTZ (Groupe UGL)