High-end
homes shine in sub-sale market
29 August 2006
(SINGAPORE)
The sub-sale market in the
high-end residential segment
was abuzz in the second quarter, both in terms of price gains and
activity, as those who bought units earlier took the opportunity
to sell them for a tidy profit.
DTZ
Debenham Tie Leung's latest analysis of caveats shows the median
price of private apartments and condos that changed hands in the
sub-sale market in Q2 jumped 37 per cent from Q1. The median price
rose from $598 per square foot in Q1 to $822 psf in Q2.
This
was the highest level since $830 psf a decade ago in Q2 1996 at
the peak of the property market, according to the firm's analysis
of caveats captured by the URA Realis database.
Subsales
essentially refer to cases in which buyers who bought from developers
sell in the secondary market prior to the project receiving Certificate
of Statutory Completion. The certificate is typically issued about
a year after a project receives Temporary Occupation Permit.
Sub-sales
- often seen as a proxy of the level of speculative activity in
the property market - were transacted largely for apartments/condos
in the higher price brands in the April-June quarter this year,
DTZ says.
The
two highest price bands DTZ used in its five-tier analysis - units
costing $1 million to less than $1.4 million, and units priced at
$1.4 million and above - accounted for 44 per cent of total sub-sale
transactions in Q2.
These
two price bands posted respective quarter-on-quarter increases of
73 per cent and 23 per cent in the number of sub-sale deals. There
was also a 60 per cent quarter-on-quarter rise in number of sub-sales
of units costing $800,000 to less than $1 million.
DTZ
attributes this partly to strong interest in exclusive projects
that were either completed recently or are nearing completion -
such as The Pier at Robertson along the Singapore River, and The
Berth By The Cove at Sentosa Cove.
'People
who want to buy homes for owner occupation or for investment with
immediate rental income flow tend to prefer a unit that is nearing
or has received Temporary Occupation Permit,' says DTZ executive
director Ong Choon Fah.
She
also points to sub-sale interest in popular projects such as Icon
in Tanjong Pagar, The Berth by The Cove and The
Sail @ Marina Bay (first tower) that were launched by developers
a few years ago at prices lower than those of similar projects released
recently.
For
instance, Ho Bee launched The Berth by The Cove in late 2004 at
an average of $785 psf. Condo units there today would be worth more
than $1,000 psf, property agents say.
DTZ
says: 'With the price recovery in high-end residential projects,
those who bought units earlier in such developments have been able
to benchmark the value of their properties against the newer projects.
'This
has created an opportunity for them to sell their units in the sub-sale
market to the increasing number of buyers who are keen on such high-profile
exclusive projects.'
DTZ's
analysis shows that while there was a pick-up in sub-sale deals
in the higher price bands in Q2, activity in the two lowest price
tiers declined from the preceding three months. As a result, the
total number of apartments and condos sold in the sub-sale market
for Q2 - at 115 - was hardly changed from the Q1 figure of 113.
Buyers
with HDB addresses continued to account for a lower share of the
number of sub-sale deals for private apartments and condos, down
to to 23 per cent in Q2 from 38 per cent in Q1.
The
firm also notes that the number of sub-sales continued to remain
relatively low in Q2 - at 2.8 per cent of the total 4,096 apartment
and condo transactions in the quarter.
'Going
forward, while sub-sales will still be significantly lower than
the levels between 1996 and 1999, the momentum for the sub-sales
market is expected to strengthen on the back of the recovery of
the high-end residential market and several high-profile projects
that are expected to be launched,' DTZ says.
'These
will boost median prices of apartments/condos transacted in the
sub-sale market. In addition, a strong take-up for these forthcoming
high-profile launches may also lead buyers who are unable to secure
a choice unit to remain interested in the sub-sale market for several
top-quality projects which have been previously released at lower
prices.'
