Property developers and agents are venturing into other avenues of business, as the once booming resale market for private and public housing has been affected by the government’s tightening measures.
According to estimates, the number of resale transactions in both markets dropped significantly in the first quarter compared to last year. However, the slowdown has spurred activity in other segments, with sales of mass-market condos rising. Home buyers snapped up 3,138 new private homes last month, including executive condominiums (ECs).
To get a piece of the action, property agencies such as ERA and PropNex are looking for direct deals with developers to market new launches.
Agents are also tapping on opportunities in the commercial and industrial sector, with many looking to sell such properties to boost sales. Some have also engaged in subletting HDB units to those who would rather rent than buy, which comprises mostly of foreigners.
Latest data from ERA and OrangeTee show that the number of HDB resale transactions hit between 4,000 and 4,500 between the January to mid-March period. This was nearly 30 percent lower than the 6,228 deals seen in the first quarter of 2011 and 24 percent below than the 5,921 transactions recorded in Q4 2011.
Tan Kok Keong, Research and Consultancy Head at OrangeTee, said the large number of new units and recent moves to allocate a larger number of flats for second-timers have reduced demand in the resale market. This has led to the cash-over-valuation (COV), which is the cash premium paid above a unit’s valuation, to also drop.
Mohamed Ismail, CEO of PropNex, also said that most buyers opt to purchase new flats because they only need to fork out the initial downpayment, which is 20 percent of the purchase price.
Related Stories:
Geylang sees boom in home launches
Keppel: Waterfront homes still appealing to foreigners
Tai Keng Court sold for S$161m