Proportion of loss-making transactions in resale market up in November

Mon, Dec 21, 2020

NISHA RAMCHANDANI


THE share of loss-making transactions for landed and non-landed properties in the resale market ticked up to 17.1 per cent in November, from 15.9 per cent in October, in contrast to the more sanguine performance in the primary sales market.

This is according to data from Edmund Tie Research, which looked at the proportion of loss-making transactions in the secondary market over the course of this year.

When zooming in solely on non-landed properties, the proportion of loss-making transactions in the resale market increased more significantly, going from 16.6 per cent in October to 18.4 per cent in November.

Edmund Tie & Company's senior director of research and consulting, Lam Chern Woon, said: "The rising proportion of resale losses run counter to the more buoyant picture in the primary sales market, and allude to the reality that certain segments of the property market remain vulnerable to gyrations in the state of the economy."

Mr Lam reckoned more homebuyers may put their homes up for sale to "restructure their finances" after the initial mortgage moratorium measures taper off come end December.

The government has extended this relief to property owners who are facing financial distress - but they must meet certain criteria, such as having suffered at least a 25 per cent decline in income.

Under the extended scheme, those who are unable to resume making full loan repayments for their residential property loans can apply to their bank to temporarily reduce their loan payments to 60 per cent of monthly instalments. This applies for up to nine months, until December 2021.

Still, even though the secondary market is not quite in the clear yet, Mr Lam is cautiously optimistic that the emergence of vaccines and the kick-off of Phase 3 in Singapore could deliver a soft landing, especially as economic activity starts to pick up once again.

In November, developers sold 767 new private homes, up 18.9 per cent from October but down some 34 per cent year-on-year. This brings the January-November tally to 8,791 units or 8.1 per cent lower year-on-year, with some expecting that new home sales for 2020 may not be too far off from the 9,912 units moved in 2019, despite the ongoing pandemic.