Singapore: More condominium units returned in first half of this year

A very good way to look at  how an economy is doing is by observing its housing prices. Singapore housing prices has just hit a new recent high when a Government subsidized housing (HDB Flat) was sold at close to a million SGD. With private condominiums at around the same prices if not more, purchasers who return their properties stand to lose around 12,500 SGD each on 1 failed transaction. Being this costly, it is certainly unusual for buyers to reject a deal unless there are huge compelling reasons.

PropNext VP Lim has mentioned that inability to secure a bank loan could be a main reason, another potential reason could be that buyers are expecting prices to fall. Both reasons does suggest that we may be facing a potential decline in housing prices and by extension a decline in Singapore’s economy. Just yesterday we have Singapore Manpower Minister mentioning that productivity rates in 2012. SGD is currently relatively strong against all major currencies, will a drop in Singapore fundamentals reverse te currency strength soon?

More buyers are returning their condominium units.

Figures from a Singapore property research firm show the number has doubled in the first half of this year, compared to the same period last year.

Between January and July this year, over 720 units have been returned.

The figure was 488 during the same period last year.

Buyers who return units forfeit 1.25 per cent of the property value.

Analysts cite two main reasons for the spike.

Lim Yong Hock, senior vice-president, PropNex, said: “In the past six months, some property prices have exceeded S$1,800 per square foot. Some buyers who purchase on impulse may later regret and pull out. Another reason could be (that) some buyers are unable to secure a bank loan.”

Via – CNA

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