[The Edge Property] More sellers selling under Seller's Stamp Duty

[danguard]

Margin call not so fast one ... So long as upkeep regular mortgage most banks will not call as will lead to frenzy

Watch the sibor rates closely.

Sibor rate rise, those on mortgage loans pay more per month.
Cannot tahan, try to sell off the property. no one buying cos everyone trying to sell.
(like going across the causeway on xmas eve).

price drop drop drop. those who are stuck kena margin calls from banks.
Sellers outdo and low ball each other desperately to offload their properties.
Prices crash further. sellers become more desperate.
bank repo those condos get stuck with them.

 

[danguard]

No one is dumping properties lah ... Mai spread fear la deh ...

maybe they kena or anticipate they going to kena the sibor rate rise.

 

[dark_aLLeY]

Between 2008 to 2011 there was a property frenzy. Now everybody stuck with condos they can't sell.

service the loan really can be tiring and tough.

Most folks is looking at short term goal like selling the condo within 5 years to make a small pile of gold.

 

[Ronaldo88]

Any risk of property bubble??

 

[dark_aLLeY]

No one is dumping properties lah ... Mai spread fear la deh ...

40% increased in pte properties kena auction sale by the bank leh....

http://www.channelnewsasia.com/news/business/nearly-40-increase-in/1951316.html

65 per cent non-landed private residential homes, while another 14.3 per cent were landed houses.

 

[repentance]

trade secret

one thing i can say, not property. not at the current market, nor the near future

Share lah. I give you 4% of my 14%.

 

[zensushi]

Mostly are speculators. Those bought studio and 1 BR are now worse off than those with bigger units because small units are near impossible to sell or rent.

Are you sure?!!?

 

[dark_aLLeY]

whole stretch of geylang still building more condos wor ...


If got 1 BR $200k, maybe can hoot!

 

[mummy1234]

Are you sure?!!?

Depends on location. Mine opposite mrt and near town in RCR at Sims ave very easy to rent out so far...

 

[JoieDeVivre]

seems like there are a lot of cash rich ppl waiting to hoot only, not like no more demand. all just waiting for over invested ppl to die then take over on the cheap. One mans misery is another mans fortune.

 

[scubaforces]

More sellers selling under Seller's Stamp Duty

By Esther Hoon, Lin Zhiqin | December 18, 2015 10:43 AM MYT

Tags: Cover StorySeller's Stamp DutyParc RosewoodA Treasure TroveRipple BayReflections at Keppel BayThe MintonFour Seasons ParkGuillemard EdgeCasa Cambio







Sellers are letting go of their properties, even if they have to incur seller’s stamp duty. However, they generally wait until the SSD falls to 4% in the fourth year of purchase. Based on the latest revision of the SSD measure, homeowners who purchased their houses on or after Jan 14, 2011 and resold them within four years of the date of purchase are required to pay SSD. The SSD rates vary with the holding period, at 16%, 12%, 8% and 4% within the first, second, third and fourth years from the date of purchase respectively.



Table



Source: URA, The Edge Property



The number of sellers who paid 4% SSD grew from 200 in 2014 to 244 between January and November this year. On the other hand, only 68 sellers let go of their properties within three years of purchase in 2015, when SSD rates were hefty at between 8% and 16% (see table).

There could be several factors behind this. First, sellers might prefer to hold cash or other liquid assets in the current market so they can re-enter the market when property prices bottom.

The number of sellers who paid 4% SSD in 2014 and 2015 had purchased the properties in 2011 and 2012 and most of them netted a profit even after paying the 4% SSD.

Second, sellers who do not wish to hold on to their properties, for financial or other reasons, might do well to offload them now rather than next year, in case prices drop further. Prices of private non-landed homes have fallen an average of 1% a quarter since 3Q2013’s peak. If this trend continues or worsens, sellers might be better off incurring the 4% SSD now instead of waiting another year and risk selling their properties at lower prices as a result of a higher supply in the market.

Third, there are sellers who are forced to let go of their properties because of the soft rental environment and interest rate hikes. These properties might be sold at a loss or within the first three years of purchase. The proportion of unprofitable transactions moves in tandem with the decline in SSD rates, declining from 80% at 16% SSD rate in the first year to 22% at 4% SSD rate in the fourth year and 12% on the fifth year, when SSD is lifted (see chart).

The findings are based on matched URA’s resale and subsale caveats for private non-landed homes as at Nov 24, 2015, with their previous transactions on or after Jan 14, 2011.



Chart



Source: URA, The Edge Property



Investors pressured to offload shoebox and large units

Projects with the highest number of resale transactions in the fourth year of purchase were Parc Rosewood, A Treasure Trove and Ripple Bay, with 19, 11 and 10 resale caveats respectively. Interestingly, these caveats involved mostly shoebox units.

Of the 19 resale caveats at Parc Rosewood, 84%, or 16 caveats, were for shoebox units averaging 445 sq ft. Similarly, for Ripple Bay, 90% — or nine of the 10 caveats — were for shoebox units averaging 490 sq ft.

The eagerness to offload shoebox units as soon as SSD fell to 4% in the fourth year could have been motivated by a soft rental market, yield compression and the interest rate hike. In addition, shoebox units in the mass-market continue to face strong competition from HDB flats for tenants. Based on our basket of properties, monthly rents for shoebox units in the mass-market were estimated to have fallen 21%, or more than $500, from $2,552 in 3Q2013 to $2,016 in 3Q2015.

In fact, URA data shows that monthly rents for a 400 to 500 sq ft unit at Parc Rosewood averaged just $1,657 in 3Q2015. Parc Rosewood was completed in 2014. Similar-sized units commanded an average monthly rent of $1,815 in 3Q2014. Over the course of one year, the average rent for shoebox units in the development has fallen 8.7%.

At A Treasure Trove, 58% — or seven of 12 caveats — were for 775 sq ft units, the smallest apartments in the project. Although the project was completed this year, there is evidence of rental decline within the course of just a few months. For example, 700 to 800 sq ft units were let at an average monthly rent of $2,367 in July. Similar units fetched an average monthly rent of $2,230 in October, reflecting a 6% decline over a period of three months.

On a more positive note, all the transactions at Parc Rosewood, A Treasure Trove and Ripple Bay were profitable after accounting for the 4% SSD payable, as the sellers had purchased the properties at attractive prices in 2011.

Larger units are also likely to be the most affected by the interest rate hike and soft rental environment. In dollar terms, Reflections at Keppel Bay accrued the most SSD from Jan 14, 2011, amounting to $1.81 million for seven resale caveats. Four caveats were for units measuring between 1,200 and 2,207 sq ft. The Minton trailed closely with $1.29 million for 18 resale caveats, with an average unit size of 1,159 sq ft.

The highest SSD incurred for a single transaction was for a 3,821 sq ft unit at Four Seasons Park, amounting to $1.14 million in SSD.



At least 18,145 non-landed homes to be freed from SSD in 1H2016

Based on our study, 18,145 non-landed homes will no longer be subject to SSD in 1H2016, as their holding periods cross the four-year mark. Of these, 1,574 units will be located in Core Central Region, 4,164 units in Rest of Central Region and 12,407 units in Outside Central Region. Some of these units could turn out to be value deals, as the owners who are under pressure to sell have weaker bargaining power.

The top three projects with at least 100 shoebox units entering the fifth year of their holding period are Parc Rosewood, Guillemard Edge and Casa Cambio.



This article appeared in The Edge Property Pullout, Issue 708 (December 21, 2015) of The Edge Singapore.

 

[onegoal]

When condo become $500 psf you won't even have the money to buy.

You know why?

Sinkie land economy will collapse.
Sinkie dollar will become worthless.
You will be jobless.
Your savings will be wiped out.

I can I can...... easily pay 50% deposit with cash and cpf. The rest loan. If bank scare. I can offer my other property that is fully paid as morgate. Currently just put some cash as USD in bank.

Some leasehold 99years are already asking below $700psf. I am waiting for $500++ confirm hoot!

Sent from Samsung SM-N910G using GAGT

 

[some1outthere]

camp for fire sales.

 

[scubaforces]

seems like there are a lot of cash rich ppl waiting to hoot only, not like no more demand. all just waiting for over invested ppl to die then take over on the cheap. One mans misery is another mans fortune.

one man's fortune is another man's misery. no. make that multiple miseries.

before you buy, depress and drag the price down further and further. go for multiple sellers and let them compete and low ball one another just to get your sale.

where is ricky1 when we need him most??

 

[Beh-Hawk]

We r in our 4th year but prob will not sell our MM unit as it is enjoying strong demand and rental yield of 4% from regional young FT..

and wat about the fx losses that u have made?

 

[scubaforces]

camp for fire sales.

camp for fire sales leading to total property meltdown like Dubai, Ireland, US Subprime and Iceland.

 

[danguard]

Comparison statistics not sure whether legit

40% increased in pte properties kena auction sale by the bank leh....

http://www.channelnewsasia.com/news/business/nearly-40-increase-in/1951316.html

 

[danguard]

Is sooner or later but not massive decline just correction Nia I feel

Any risk of property bubble??

 

[Zze121]

Many sideliner here, but as days gone by, getting loan is much more difficult even with ABSD removed.
Base on recent land bid price, no sign of price dropping.

 

[K.M.T.]

40% increased in pte properties kena auction sale by the bank leh....

http://www.channelnewsasia.com/news/business/nearly-40-increase-in/1951316.html

that's serious, not just the luxury units are going for fire sales, even the cheapo condos.