S’pore’s private property resale market offer discounts of up to 50%

Source : Channel NewsAsia – 12 Jun 2009

If you’re looking to buy a private high-end property, market watchers said the resale market appears to be offering better deals right now.

They said discounts of up to 50 per cent can be found in the resale market for Singapore private properties compared to developer launches where prices may only be lowered by about 20 per cent.

Property market sentiment appears to be recovering with developers launching new units to test the market.

Some have even dangled incentives like discounts and other perks which effectively amount to deferred payment schemes.

But analysts said buyers may find better deals elsewhere.

Karamjit Singh, managing director, Credo Real Estate, said: “At this stage, buyers are probably much better off scouring the resale market especially among those projects originally sold well before the peak of the market, sometime in 2006 or early 2007.

“This would still give the sellers who bought originally from developers some margin to make. And there’s probably something left behind on the table for the new buyer to make from the upside.”

For example, a unit at Ardmore 2 in the Orchard area was transacted for as low as S$1,600 per square foot in the past month.

This same unit would have fetched more than S$3,000 per square foot during the market’s peak in 2007.

And about five units at Tate Residences were sold below S$2,000 per square foot. At the market’s peak, prices hit as much as S$3,500 per square foot.

Credo Real Estate said prices for high end properties have settled to around S$2,000 per square foot today.

Such deals in the high end segment are attracting foreign investors back into the market. They had left earlier due to the credit crunch and poor market sentiment.

But developers are not likely to drop prices by more than 20 per cent for new properties due to concerns for valuations.

Donald Han, managing director, Cushman & Wakefield, said: “Valuations tend to take note of last transacted. If you sold some project for S$3,000, S$4,000 per square foot, let’s say, at end 2007, and now you sell at S$2,500 per square foot, it creates a fair amount of disruption in market valuations. So the tendency is to hold back and wait for better market timing before launching.”

Overall, market watchers project that some 6,000 units will be sold in the primary market this year if the economic conditions stabilise.