By Wong Siew Ying | POSTED: 31 May 2013 12:04 AM | CNA

SINGAPORE: Market watchers have said the private resale property market is seeing a gradual recovery after a drop in transaction volume in the first quarter this year following the introduction of cooling measures in January.

Based on preliminary estimates, some analysts said sales could potentially double in the second quarter compared to the first quarter.

New private homes may continue to pull in the buyers, but some analysts said the resale private property market is also picking up.

Real estate agency PropNex said it has seen resale transaction volume jump 20 per cent in April and May.

Enquiries and turnout at viewings of resale units have also improved, largely because buyers believe resale properties offer better value and comparable rental yield.

Mohamed Ismail, CEO of PropNex, said: “Sky Habitat at Bishan… is S$1,600 psf (per square foot). Bishan 8, opposite, goes at S$1,100. In other words, when you buy a resale unit, you are going to pay lower per square foot… absolute quantum is going to be lower, which means you pay lesser ABSD (additional buyer’s stamp duty) to the government.”

SLP International Property Consultants estimates that some 3,600 to 4,300 units of both completed and uncompleted units in the resale market could change hands in the second quarter.

This is up from about 2,200 units sold in the previous quarter.

Based on caveats lodged, analysts said that about 3,500 resale units have been transacted from January to early May this year.

About two-thirds of them are “family-sized” units above 100 square metres.

They added that the resale property market is likely to see a sustainable recovery, but there are potential risks as well.

Nicholas Mak, executive director of SLP International Property Consultants, said: “If prices continue to increase and rental yields continue to be compressed, one of the risks is that if interest rates were to increase this year or next year, we could see that this would actually discourage investors, because if rental yield is compressed to such a low level, any increase in interest rates would make that investment property less attractive.”

Mr Mak said that currently, the average rental yield for private homes in Singapore hovers between 1.8 per cent and 2.2 per cent.

Some analysts said that prices in the resale market are catching up with prices of units in new launches. For the whole year, they said that prices of resale private properties could go up by as much as 8 per cent, barring any additional cooling measures.

Some analysts added that the total units of resale private homes sold in 2013 should be comparable to the 15,136 transacted last year.

– CNA/ms

http://www.channelnewsasia.com/news/business/singapore/gradual-recovery-in-private-resale-prope/693018.html