Affordable hotspots

Experts say mass-market condos will lead housing demand this year

With private home prices at record highs, industry players expect developments catering to the mass market to lead demand this year.

Property is seen as a safe and appreciating asset, they say, adding that Singapore’s growing economy and low borrowing rates have injected ample liquidity into the market. But even as property is viewed as a good investment, affordability will be key as prices continue to trend higher, they add.

With the Housing and Development Board resale market largely closed off to private property owners, those looking for a second property to invest in are now eyeing mass-market condominiums.

Mr Chris Koh, director of Dennis Wee Group, said: “They already have one private property. The funds that they have are very limited to invest in another high-end private property. They had thought of a HDB flat a year ago, but now they’ve decided to buy another mass-market, lower-end private property.”

Cooling property measures introduced on Aug 30 last year disallow dual ownership of private property and an HDB flat. A private home owner has to sell off his property before he’s allowed to buy an HDB flat.

Foreigners settling here will also drive demand for mass-market condos – typically those going for $1,000 psf or less.

Mr Koh added: “We have two groups of foreigners. We have foreigners who are very rich, and there are foreigners who come to Singapore who just want a new place for their children to grow up. They are not as rich as the high-end. So a lot of them enter the mass market. They will buy condominiums near public schools. They will buy condominiums near public transportation.”

Foreign investors who traditionally might have snapped up more expensive developments are also thinking twice.

Mr Colin Tan, Chesterton Suntec International’s head, research and consultancy, said: “People see risk. So even though they may have enough cash to put a downpayment for something high-end or in the mid-tier, I think sometimes, in order to mitigate the risk, they may still go for the mass market.”

Despite a third round of property cooling measures last August, Singapore is still widely seen by investors as a good place to park their money, especially when compared to other countries in the region which have introduced tougher anti-speculation measures.

Hong Kong, for example, imposed a 15-per-cent-stamp duty on all properties sold within six months of purchase.

Market watchers expect private home prices to inch up 1 to 2 per cent each quarter this year, in line with Singapore’s expected economic growth.

Source : Today – 7 Jan 2011

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