Mass market and mid-tier projects dominated the private residential market last year.
Sales recovered at a healthy clip – with 14,725 units changing hands for the whole year. That is a shade off the 2007 peak of 14,811 units, according to figures released by the Urban Redevelopment Authority (URA).
Observers said foreign buyers, mostly from China, contributed to the strong sales.
Colin Tan, head of research and consultancy, Chesterton Suntec International said: “Some of the funds that are coming down to Singapore originate from China.
“If you have been following the China market, you will know that there has been a real estate boom there. Some of the investors have taken profit and have moved into Hong Kong and Singapore.”
Although the overall annual figure was strong, the pace of new home sales has been trending down since August last year.
The decline continued after September when the government stepped in to cool the property market bubble by removing some loan schemes that speculators had taken advantage of.
Last month, URA data showed that just 481 units were sold, mainly due to the mass market segment losing some steam.
Going forward, observers noted that the prime residential segment remains firm, and continued foreign interest means that developers are likely to focus future efforts in that area.
Chua Yang Liang, head of research, Southeast Asia, Jones Lang LaSalle, said: “Developers are likely to take note of the current demand trend that we have seen in the December numbers and perhaps focus more of their launches in the prime market.
“After all, economies in China and Southeast Asia are definitely showing better than expected performances.”
Observers also said that the threat of a property bubble forming is steadily decreasing. With take up rates and prices beginning to stabilise, they expect rates and prices to match pace with the general economic recovery and not get ahead of themselves in the coming quarters.
Source : Channel NewsAsia – 15 Jan 2010