It was reported in our de facto Business newspaper that a total of $107 million in gross profit was pocketed by non-landed private home owners from quick resale over the five quarters of Q1 2012 to Q1 2013. This is according to a report released by real estate firm OrangeTee.
Thursday, May 2, 2013
Private home resales made profit for past 5 quarters!
It was reported in our de facto Business newspaper that a total of $107 million in gross profit was pocketed by non-landed private home owners from quick resale over the five quarters of Q1 2012 to Q1 2013. This is according to a report released by real estate firm OrangeTee.
The overall
private residential price index, which includes private condominiums and
apartments but excludes Housing and Development Board (HDB) executive
condominiums, is now 60% above the
trough in 2009.
Between Q1 2012
and Q1 2013, a total of 103 projects obtained TOP, according to data from the
Urban Redevelopment Authority (URA) and Building and Construction Authority
(BCA). Out of these, 68 projects had transactions in the same quarter upon
completion, making up a total of 348 transactions.
Only one out of
the 348 transactions was unprofitable, and this was described as a
"one-off occurrence".
The report also
highlighted that, over the same period, each newly completed unit yield an
average return of 33%. The most profitable non-landed private residential
segment was the Outside Central Region (OCR), which made an average profit of
41%, compared to 31% for the Rest of Central Region (RCR) and 25% for the Core
Central Region (CCR).
In all three
regions, however, shoebox units, measuring 50sqm or less, were less profitable
than their non-shoebox counterparts. Average profitability per unit was
$132,000 or 25% in the last five quarters, lower than that of the overall
market.
Over the last
five quarters, average gross profitability peaked at Q3 2012, when owners saw
an average return of 43% per unit. However, since then, average profitability
has been falling as the rate of appreciation in private home prices moderated,
and such profitability may not be repeated in the future. This is especially when
the full effect of the cooling measures starts to sink in.
Ultimately, the
report expressed optimism for the future of the market, referring to sustained
foreign capital inflow, low interest rates, and "record land prices"
in recent Government Land Sales (GLS).
The million$ question is: for HOW LONG will foreign capital inflow and low interest rates be sustained....
3 comments:
ECB said as long as it is necessary...(means in my humble opinion ...open ended?)
So let's hope ECB is right (this time).
Then again, they cannot even get their own house in order... :)
Lovelly post
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