Prices of luxury homes in Singapore have moderated in the first quarter of this year due to property cooling measures, data from CB Richard Ellis’ (CBRE’s) Asian Luxury Residential Capital Value Index showed on Monday.
The measures, announced in January, included raising the seller’s stamp duty and reducing credit available to those who already have outstanding mortgages.
CBRE said the increase in prices of luxury homes in the core central region moderated to 0.9 per cent quarter-on-quarter, while sales volume was also down by 20.4 per cent.
Prime rents in Singapore remained unchanged, but CBRE said they appeared to show signs of softening towards the end of the quarter, along with the slowdown of expatriate leasing demand.
Commenting on the outlook of luxury residential markets in Singapore, Joseph Tan, executive director of residential at CBRE, said that with the absence of further government initiatives in 2011, he expects minimal growth in both the inflow of foreign investors and home prices.
As such, CBRE said it expects the volume of luxury transactions in 2011 to be about 150 to 200 units, with prices likely to average at S$3,000 per square foot (psf) for resale projects and S$3,500 per square foot for new projects.
Overall in Asia, the CBRE index, which measures the capital value of luxury residential properties, rose by 5.5 per cent quarter-on-quarter in the first three months of this year. This was up from the 0.9 per cent registered in the previous quarter.
However, CBRE pointed out that most markets – including Beijing, Shanghai and key South East Asian cities – recorded a lower rate of price growth.
This came as sales slowed, following the introduction of measures directed at cooling residential property markets in the region.
Anton Eilers, executive director of CBRE Residential, Asia, said: “Home buying demand is expected to remain healthy as the regional economy continues to expand.”
He added that the cooling measures introduced in a number of major markets will moderate price growth of luxury residential property over the course of the year, and prices and rental growth.
Source : Channel NewsAsia – 6 Jun 2011