An analysis of caveats shows that in the second quarter of 2009, enhanced view in the private residential section has filtered from the mass-market to the higher levels.
The proportion of caveats for private housing dealings in Q2 was about $1.5 million, more than the result in Q1’s.
A study of DTZ showed that 22 percent of transactions in the second quarter were over $1.5 million, as compared to only 10 percent in the first quarter.
In addition, the amount of transactions in the $1,500 to 1,999 psf price bracket grew more than 10 times, being 34 units in Q1 to 369 units in Q2. The amount of deals for units amounting $2,000 psf also increased from 10 in Q1 to 67 in Q2.
A quarter of caveats lodged in the second quarter were properties located in the prime districts 9, 10 and 11, an increase from 14 percent in the first quarter. This is another indication of a growing activity on the higher market end.
Home buyers with private addresses were made up of 56 percent private home buys in Q2, an increase from 44 percent in the first quarter. DTZ said this shows a spillover of purchasing from the mass market to the higher tiers.
In contrast, the share of caveats lodged for private home purchases by HDB upgraders dropped 56 percent in Q1 to 44 percent in Q2.
Chua Chor Hoon, head of DTZ South-east Asia, said: “HDB upgraders have been able to participate in the current home buying wave due partly to the wealth effect brought about by rising HDB resale prices”.
“As well, wages went up in the past few years prior to the stagnation and wage cuts seen last year and this year. As a result, prices of entry-level private condos are generally still quite affordable for HDB upgraders”.
“But if developers keep on increasing prices, mass-market private condos will become less affordable again to HDB upgraders”.
The analysis of DTZ indicates that 75 percent of the whole private housing transactions, including buyers with HDB addresses, were below $1 million in the second quarter, an 87 percent decline from the first quarter.
In addition, 37 percent of the buyers with HDB addresses acquired properties in the $600,001 to 800,000 price bracket during the second quarter. As compared to that, 60 percent of the buyers with private addresses bought units pricing to over $1 million.
DTZ discovered that home buyers with private addresses bought big and costly homes than buyers with HDB addresses, which bought smaller homes.
It stated that 77 percent of purchases regarding HDB upgraders were 1,400 sq ft houses, compared with 52 percent of dealings by buyers with private addresses in the second quarter.