Friday, August 10, 2012

Singapore's unprofitable housing sector

Property developers’ profitability fell 14 percent to a three-year low of S$2.7 billion in the first half of 2012 from S$3.2 billion in 2H2011, according to Square Foot Research.

The figure is much lower than the most profitable half-year of 1H2011, when private homeowners generated over S$4 billion in gross profits.

“The number of unprofitable transactions in the secondary market hit a low of 78 in 2H2011. In percentage terms, only one out of 100 transactions was unprofitable,” said Square Foot.

However, the number increased to 99 in 1H2012, or two out of 100 transactions were unprofitable.

Still, the research firm noted that “although profitability in the secondary market has declined from its peak, average profitability per transaction in the secondary market recorded a new high of S$522,056 in 1H2012, a nearly two-fold jump from S$288,991 in 2H2009”.

The most profitable projects in the first half of the year were Serangoon Garden Estate, The Quintet, Frankel Estate, Seletar Hills Estate and Trevista.

Meanwhile, the most unprofitable projects on Square Foot’s list are Reflections at Keppel Bay, St Regis Residences, Latitude, CityVista Residences and Duchess Residences.

View the original article here

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