Demand for landed properties likely to be robust

Demand for landed properties is likely to be robust this year, according to market watchers.

They said landed property buyers are typically unaffected by the government measures to curb speculation. That is because they are less likely to speculate on their houses as they are usually long-term owner occupiers.

Analysts said going forward, limited supply of landed properties, low interest rates and abundant liquidity will fuel demand.

Landed properties like detached, semi-detached and terrace houses are in great demand. And the smaller developers who build mostly landed houses look set to benefit from it.

One such developer is Mushrooms Realty, which mostly builds detached houses.

Tan Wee Yong, founder of Mushrooms Realty, said: “Traditionally, they might be out of people’s budget. But nowadays, … given the choice and if the price differential is not that great, I think most Singaporeans will go for landed property.”

Despite a slew of cooling measures announced last year, healthy demand for landed properties pushed prices up by 31 per cent in 2010, outpacing the 17.6 per cent increase in non-landed home prices.

Nicholas Mak, executive director of research & consultancy, SLP International, said: “We see low interest rates, we see more liquidity in the property market, but another reason is that some of the home buyers feel that the newer apartments tend to be a bit smaller than some of the older apartments.

“And in order to have the luxury of space, some of these buyers turn to landed properties.”

Analysts said landed home buyers usually hold onto their properties for a few years and should be able to avoid the new stamp duty tax of 4 per cent on homes sold within the fourth year of purchase.

Landed property sites have doubled in price in the last three years. For instance, a landed property site in Serangoon Gardens has seen its price jump from about S$500 per square foot (psf) three years ago to about S$800 psf currently.

Demand for landed property sites is also overwhelming current land supply.

Mr Tan said: “For freehold, I think there is a supply crunch. Actually, as long as there is a new piece of land coming out in the market, there will be a lot of interested parties … if the asking price is at the market rate.”

According to the Urban Redevelopment Authority, there are currently 70,000 landed housing units available in the market. That is 30 per cent of the entire private home supply.

Even with economic growth slowing this year from last year’s record-high level, analysts said landed property prices should rise by 8 to 12 per cent this year.

Source : Channel NewsAsia – 16 Feb 2011

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