Singapore Back to Real Estate News Homepage to RSS for this country

SG Property News

SG Weak demand for resale property to continue: DTZ

Property Here - Thursday, May 23, 2013

Share to:

By Nikki De Guzman:

Singapore saw a sharp decline in residential resale volumes across all segments in the first quarter of 2013, according to a DTZ report. 

The quarterly and year-on-year drop is a “stark contrast” to 2012, when resale deals rebounded following the introduction of the additional buyer’s stamp duty (ABSD).

“The recovery in resale volume last year was due to buyers finding better value in the resale market after some projects in the primary market set benchmark prices. In comparison, developers were more competitive in their pricing strategies this year and the latest round of cooling measures in January 2013 were more comprehensive than that in December 2011. The mismatch in the expectations between buyers and sellers could also have contributed to the weak resale volume,” said DTZ. 

In terms of buyer profiles, foreigners accounted for 9.9 percent of all transactions in Q1 this year, up from an average of 6.4 percent in 2012. 

However, demand from local buyers fell as they are now required to pay ABSD for their second and subsequent properties. 

“Buying behaviour varied among non-Singaporean groups in the resale market. Firstly, purchases by USA nationals remained resilient, especially so in the high-end segment, as they are not subject to the 15 percent ABSD for foreigners. Transactions by Indonesian buyers in the high-end segment however fell. In comparison, demand from mainland Chinese buyers held up well across most price segments, except for those costing below S$1 million.”

Moving forward, DTZ expects the resale market to underperform as there are no discounts being offered unlike in the primary market. Buyer activity is also expected to be lower due to higher stamp duties, weaker rental growth and stricter financing regulations.



Nikki De Guzman, Junior Reporter at PropertyGuru, wrote this story. To contact her about this or other stories email nikki@allproperty.com.sg