The secondary market witnessed a 50 percent drop in the number of private homes sold last year to 7,695 units from 15,678 units in 2012. This is the lowest since 2004 when only 6,476 units were transacted, according to caveats analysis by DTZ.
Notably, the decline in secondary market transactions, which include subsale and resale transactions, was larger than the 31.3 percent drop in the number of private homes sold by developers in the primary market.
The steeper decline could be partly attributed to the fact that those owning multiple properties may not be in a hurry to sell as replacement costs have increased, "with the higher additional buyer’s stamp duty (ABSD) and the permanent and structural total debt servicing ratio (TDSR) framework in place," noted Lee Lay Keng, head of Singapore research at DTZ.
"Furthermore unlike developers, individual owners are less able to offer incentives or discounts to entice buyers."
"Meanwhile, the smaller decline in primary market acquisitions could be due to buyers’ tendency to gravitate towards more lifestyle driven projects offered by developers," said Ong Choon Fah, chief operating officer of DTZ South-east Asia.
"An advantage of picking a unit in a new project over an older property from the secondary market is that developers are minting smaller units these days, which makes the lump sum price more affordable," she added.
Christopher Chitty, Senior Content Producer at PropertyGuru edited this story. To contact him about this or other stories, email christopher@propertyguru.com.sg
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