Landed homes lift private property market

Source : Straits Times – 23 Jan 2010

LANDED homes turned out to be the star performer of the private property market last year, rising far more in price than other types of housing.

As a whole, detached, semi-detached and terrace houses jumped in price by 8.3 per cent in the fourth quarter of last year and 7.7 per cent for the whole of 2009.

This significantly outstripped condominiums and apartments, according to data released by the Urban Redevelopment Authority (URA) yesterday.

Despite rising 7.2 per cent in the fourth quarter, non-landed property registered a meagre 0.5 per cent price increase for last year.

‘Landed homes are limited in supply, so people always aspire towards owning one,’ said Ms Chua Chor Hoon, head of South-east Asia research at DTZ Debenham Tie Leung.

‘When the market was in a slump, some buyers took the chance to buy landed properties. And now that condominium prices have gone up a lot again, people are seeing better value in landed homes.’

Terrace houses, the cheapest type of landed housing, were the most sought-after. Prices of terraces shot up 10 per cent last year, followed by semi-detached houses with an 8.8 per cent rise.

Detached houses – which include good-class bungalows, the grande dames of Singapore property – rose in price by a smaller 5.6 per cent last year.

Taken together with non-landed property, this translated into overall private home prices rising by 1.8 per cent for the whole of last year.

The rise in prices, despite 2009 being a recession year, was entirely due to the property market roaring back to life in the second half of the year as the economy emerged from recession.

Private home prices jumped 7.4 per cent in the fourth quarter, after soaring 15.8 per cent in the third quarter, said the URA yesterday.

Unlike in earlier quarters, the price increase between October and December was led by more expensive homes nearer to town.

Prices of homes on the city-fringe – covering the East Coast, Queenstown and Bishan – rose the most, by almost 10 per cent.

Homes in the core central region, which refers to the prime districts of 9, 10, 11, Marina Bay and Sentosa, saw prices rise by 7.3 per cent.

For the first time, suburban homes were the laggard in the fourth quarter last year, with a price rise of only a 6.3 per cent.

But although overall prices surged in the fourth quarter, home sales slowed considerably.

Only 1,860 new homes were sold in the final quarter of last year, just a third of the sales in the preceding quarter, said Mr Li Hiaw Ho, executive director of CB Richard Ellis Research.

Resale and sub-sale transactions fell by about half in the fourth quarter, which is traditionally a subdued period for home sales. Last year, this coincided with the introduction of government measures to cool the property market in September.

For the whole year, home buyers bought 14,688 new homes from developers and 18,129 homes from other home owners. While this was a big jump from the muted activity in 2008, sales were still lower than during the boom year of 2007, Mr Li said.

He expects home sales to moderate this year after last year’s rapid buying activity.

About 8,000 to 10,000 new homes will probably be sold, while prices are projected to rise by 8 per cent to 10 per cent through the year, led by the high-end segment of the market, according to Mr Li’s forecasts.

‘Already, the year has started with a positive sentiment in light of the Government’s forecast of 3per cent to 5 per cent economic growth for the whole year,’ he said. ‘Increased hiring and pay rises are also on the cards.’