Looking For A Home To Buy? Try Resale

Source : The Sunday Times, Aug 9, 2009

Prices are mostly lower, living space is larger, but one must choose carefully

Now that the property market has picked up, individual sellers are out in full force.

They are putting up their properties for sale, from the newest uncompleted homes to fully furnished tenanted units and ageing apartments.

For home seekers, this means that apart from brand-new launches, there are plenty of choices in the resale market.

Even developer Keppel Land (KepLand) has started releasing tenanted, fully furnished units at its 99-year leasehold Caribbean at Keppel Bay for sale.

The 969-unit development, launched in 2000 at about $800 per sq ft (psf), had been fully sold, except for 168 units that KepLand has kept for leasing purposes under Caribbean Residences.

The developer declined to disclose the number of transactions, but said asking prices are around $1,300 psf to $1,400 psf. Caveats lodged last month show deals done from $1,131 psf to $1,218 psf.

But, said HSR Property Group executive director Eric Cheng, 'the resale market is not that hot compared with 2007, when you could sell one apartment within one or two days'.

Right now, only the new projects are moving very fast, he said.

He added that 'market sentiment is strong as people are very confident. I think a bubble is forming but it is not near the bursting level yet'.

In the resale market, not only are the units bigger, but living space is also larger as there are fewer bay windows and planter boxes unlike in new condo units.

Prices are also much more affordable, said Chesterton Suntec International's research and consultancy director Colin Tan. But at the moment, 'a large amount of the liquidity or excess money in the market is going mostly into the new launches, that is, uncompleted properties', he said.

'The genuine buyer may end up paying a high premium for a newly launched unit and...spend his whole life working to pay off the mortgage.'

Buyers may want to consider already-built or older projects near new launches which are selling at lower prices, property experts said.

'Quite a number of buyers are not aware that there are better buys in the resale market. They know only how to buy from showflats,' said an investor who recently profited from the sale of a Citylights unit, which he had bought for just $550 psf three years ago and sold at $1,200 psf.

Buyers should ask themselves which properties are available for the budget they have, he suggested. Then, they should narrow down their choices and pick a unit that gives them the most value for their money.

In the Tanah Merah area, deals caveated last month at the nearly completed Casa Merah were at $699 psf to $751 psf, below the average launch price of $810 psf at the sold-out project Optima just next door. Some sellers at Casa Merah may now be asking for higher prices but it remains to be seen if buyers will bite.

Sellers at other completed projects may also be asking for more, as Mr Tan pointed out. He cited an owner of a low-floor 1,453 sq ft unit at Savannah CondoPark in Simei Rise who recently raised his price from $850,000 to $920,000 in line with market sentiment.

This is despite the fact that the owner has failed to find a buyer at the earlier price since January, said Mr Tan.

Greed often gets in the way of a deal, property experts said.

Said the unnamed investor: 'In order to entice buyers to buy resale units, sellers must price them at least 10 per cent below developer units in the vicinity.'

In general, prices of many completed projects are still falling but a few of the better ones have seen some price increases recently, said Mr Tan. However, even then, the increases are minimal compared with those of the new launches.

For those who are ready to commit to a property purchase, it may pay to look at completed homes in the resale market.