SINGAPORE - Three weekends ago, eager buyers snapped up all of the 738 units (498 condo units and 240 Soho-inspired units) of the J Gateway condominium in the west within 24 hours.
The remarkable performance surprised market watchers, including many developers, because the last time a sizeable project was fully sold within such a short span of time was in 2009, with Optima@Tanah Merah.
One question that figures is: "Why are people still buying when prices are at a record high?"
This is especially true for new launches. Our research shows that in the first five months of the year, developers sold a total of 8,247 homes, with a 100 per cent overall take-up rate (developers launched 8,229 units during the same period).
Including executive condominiums, the sales would have been 9,601, a 111 per cent take-up rate. In other words, all the units that developers launched this year have been absorbed by the market.
In contrast, resale volume in the first five months of this year was only about 40 per cent of new sales. Home owners managed to sell only 3,430 units, according to the Urban Redevelopment Authority's Realis caveats data.
One key reason that more buyers have been swayed towards the purchase of uncompleted homes has to be the imposition of the seller's stamp duty.
Anyone who sells his property within four years will be penalised with a stamp duty of up to 16 per cent of the value of the property.