Posted by luxuryasiahome on August 31, 2008
The panic selling of homes that some property experts had forecast months ago has not materialised after all - not this year, anyway.
Market watchers had previously warned that the negative sentiment in the property market - which stemmed from the United States sub-prime crisis late last year and persists still - might prompt property investors to offload their uncompleted units at fire-sale prices and drive home prices down.
But a recent analysis by Savills Singapore found that almost everyone who sold a private apartment or condominium unit in the sub-sale market in the first seven months of this year pocketed robust gains.
This implies that, for this year at least, property investors are still sitting on comfortable profits and are likely to be in no hurry to exit their investments, said Savills’ director of business development and marketing, Mr Ku Swee Yong.
‘The cost of holding on to properties is quite low right now because of low interest rates, so for those who haven’t already exited the market, there’s no urgency to sell,’ he added.
When an individual buys an uncompleted property and resells it before it has been built, the transaction is called a sub-sale. Such sales are often used to measure property speculation, since sub-sale sellers are often short-term investors who never intended to occupy their units.
Savills’ data, first published in the Business Times last Tuesday, showed that 97 per cent of sub-sale sellers this year have cashed out at a profit. On average, they reaped $417,563 per unit, or a 36.5 per cent gain.
Property consultants say this comes as little surprise, as many of the units that were sub-sold this year were in developments that were launched in 2006 or even earlier, at relatively low prices that allowed plenty of room for price gains.
Citylights in Jellicoe Road, for instance, which saw the most number of sub-sales this year, was first launched in December 2004 at an average price of $590 per sq ft (psf). Up till the development was completed earlier this year, units changed hands at steadily rising prices, topping out at $1,200 to $1,300 psf.
But while the private housing market may be spared the carnage of selling hysteria this year and even next year, some industry players caution that 2010 may be a different scenario.
The projects that will be completed then were mostly launched during the peak of the market last year and this year. Buyers bought high and are likely to register losses if they want out of their investments, experts say.
Generally, there is a rush to offload units right before a project’s completion, as that is when more payment instalments are due.
So come 2010, if prices stay soft and the economy has not made a spectacular recovery from the current slowdown, buyers might start to feel a greater urgency to sell their properties and the market might be flooded with these ‘expensive apartments’, said Wing Tai chairman Cheng Wai Keung last week.
Mr Colin Tan, associate director of Chesterton International, added that investors who have cashed out by now are the experienced ones, while ‘it is the novice investors who are usually left holding on to their units’ and may be more prone to panic selling later.
Already, the profits that were reaped by sub-sellers this year have dwindled according to how recently they bought their units, consultants noted.
Those who made the original purchase in 2004 and 2005 gained more than $600,000 each on average, while those who bought their units last year made only $230,000 on average, according to Savills’ data. Investors who bought and sold within this year reaped only about $175,000 on average.
Part of this is due to the general principle that the longer you hold a property investment, the greater the gains will be, said Dr Chua Yang Liang, head of South-east Asia research at Jones Lang LaSalle.
However, a large part of the difference in gains also arose from the huge run-up in prices over the last two years. This spectacular growth is unlikely to be repeated, removing a cushion from investors still hoping to resell their units before completion in 2010 and beyond.
But a glimmer of hope for the property market lies in the healthy profits that investors have made so far this year.
Savills estimates that punters took home a total of $350 million in profits alone from sub-sales in the first seven months of this year. While consultants think it is unlikely that all the money has already been ploughed back into property, they expect it to return to the market eventually, which may help to prop up prices.
However, Chesterton’s Mr Tan believes this will happen only when current prices soften enough to attract investors again.
‘Properties are not like shares - you cannot come in and out even as prices decline,’ he said. ‘To lessen your risk, you come in only when you think prices have bottomed out or are at sustainable levels.’
Source : Sunday Times - 31 Aug 2008
Subscribe to:
Post Comments (Atom)
Blog Archive
-
▼
2008
(752)
-
▼
September
(64)
- 龟屿进香时节又到
- 3400单位新组屋年底前推出
- 美国标准普尔500指数
- 海峡时报指数(STI)
- 榜鹅执行共管公寓地段招标
- “末日博士”麦嘉华:我看好新加坡甚于香港
- 台湾《天下》杂志文摘 新加坡要变成Fun City
- High-end home market going off the boil
- 資金緊缺地產商陸續降價 中國樓價下跌或剛剛開始
- 海氏集团全球调查:港泰中经理在亚洲消费力最强
- 丹那美拉地铁站 (Tanah Merah MRT Station,代号EW4) 对面 私宅地段吸引七方投标
- 城市发展 (2008-09-10)
- 京滬等城市大多數居民房價收入比遠超國際水準
- 武漢待售房“全國第一”後遺症:降價引發集體退房
- 萬科敢於降價宣言被指屬實
- Size up home supply again
- Silversea - Located in Marine Parade Road. Leaseho...
- 30 units sold at Martin No. 38
- Experts say Singapore won’t be spared from market ...
- 上海二手屋指數22個月來首次下跌 新房促銷價直逼二手價
- 上海二手房指數近兩年來首跌 世紀公園跌幅最大
- 任志強:真正的冬天還在後頭
- SC环球马丁路38号公寓 首30个单位找到买家
- 《謝國忠》三○年經濟最大調整在即
- 南京萬科打7.7折 河西精裝房8800元/平叫賣!
- 分析员:恒指明年可望上2万7500点
- Serangoon Gardens: Where 5,000 expats call home
- Mortgage rates still at rock bottom
- 5000读者享文化盛宴
- “醉花林”7000万元新会所动土
- 美国“两房”被接管 港股料喘息
- 雷曼兄弟预测我国经济增长 从4.3%调低至3.2%
- 雷曼兄弟:楼市转淡声中 中档私宅下跌危机最大
- 海峡时报指数(STI)
- A股盈利急跌意味着什么?
- 美国签证 国人赴美明年起须上网登记 现已开始试行
- 世界级龙狮队 河畔翩翩起舞
- 萬科公司債票面利率處下限
- Reboot Your Workflow This Fall
- 程宗楷:年輕人要像水庫,迅速累積能量
- 做自己的教練 標簽: 鍛鍊 《30雜誌》撰文=吳永佳
- 人民日報談斷供現象:樓市調控決不半途而廢(圖)
- Economists lower growth forecast
- What goes up will also come down
- 月圆河畔庆中秋 红河州歌舞团呈献少数民族歌舞
- 美林:新兴市场股票 再跌10%即可买进
- 亚洲货币纷纷下跌 新元兑美元一度跌至八个月来低点
- 萬科降價風刮到杭州 4個樓盤折扣幅度7.3-8折
- Developers starting to preview projects
- Now, deferred payments with a twist
- Waiver aimed at lessees of state land
- Aust rate cut a relief for homebuyers
- 50MM Lens Review (Canon 50MM 1.4)
- 分析师:房地产股跌势未见底
- 普陀地王重新上市 底價猛增4億多
- 從金融機構的行為模式 發現價格
- 上海樓市頻現零成交
- 萬科旗下8個樓盤限時推出特價房源
- 上海房價05年大跌故事重演?
- 謝金河》台灣電子一軍實力愈來愈強韌 ( 2008/08/29 )
- 高盛:散裝航運景氣將連壞三年 ( 2008/08/29 )
- Fire sale? Don’t hold your breath
- 海峡时报指数(STI)
- 黄源荣:美次貸风暴影响会长达两年 新加坡经济增长将缓慢
-
▼
September
(64)
No comments:
Post a Comment