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19-05-14, 11:52
http://www.straitstimes.com/archive/monday/premium/money/story/falls-landed-home-prices-may-ease-20140512
Falls in landed home prices 'may ease'
Short supply of such properties likely to cushion price decreases: Analysts
Published on May 12, 2014 1:40 AM
By Melissa Tan
A SEVERELY limited supply of landed homes may help their prices hold up better this year compared with condominiums.
Analysts say although landed home prices have fallen over the past few quarters owing to generally poor market sentiment, the segment's slowdown could ease off this year and even bottom out.
They tip landed home prices to fall by 2 to 6 per cent this year, less than the 5 to 8 per cent tumble predicted for the overall private property market.
"Genuine landed home buyers could come back in the second half of this year as prices bottom out," said Mr Jeffrey Hong, chief executive of real estate firm GPS Alliance. "The current situation offers them a window of opportunity to get into the market."
Mr Hong said that buyers may be able to pick up bargains in suburban areas such as Bukit Batok, Loyang, Jurong and Sembawang.
Although landed home prices fell in tandem with the overall housing market in the first quarter this year, their decline was gentler.
Landed home prices slid 0.7 per cent in January until March from the preceding quarter, the Urban Redevelopment Authority said last month. Overall, private home prices dropped 1.3 per cent in the same period.
The decline in landed home prices in the first quarter was also smaller than their 1 per cent fall in the fourth quarter last year.
Analysts said that the scarcity of landed homes in Singapore would likely cushion their price decreases.
Terraced houses, in particular, may see more demand since their overall prices tend to be lower than those of semi-detached houses or bungalows, they added.
SLP International research head Nicholas Mak noted that landed homes make up a mere 3.2 per cent of the estimated 76,300 private homes that are expected to be completed between this year and 2017.
"This indicates that the prices of landed homes could increase rapidly again when property prices recover in the future."
Mr Hong also noted that some landed properties could be acquired for redevelopment into cluster housing or apartments, meaning that landed housing could get rarer.
Government land sale sites zoned for landed housing are very rare, he added.
Mr Mak observed that landed home prices have historically tended to be "more robust" than non-landed home prices.
Their prices climbed more compared with that of non-landed homes during the property market boom from the second quarter of 2009 to the middle of last year, he said.
"The strong price growth of landed homes was partly driven by the arrival of new rich immigrants," Mr Mak said.
"Some of them became Singapore citizens which qualified them to buy landed homes."
The boom ended after tough home loan restrictions were imposed in June last year, capping the sum that buyers could borrow to buy property.
But even after that, landed home prices fell less than non-landed home prices from October last year to March this year, Mr Mak said.
Analysts noted, however, that landed home rentals could weaken further.
"Landed homes typically do not command a good rental yield (unlike) most condos," Mr Hong said.
He tips that rents could fall 5 to 8 per cent this year.
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Falls in landed home prices 'may ease'
Short supply of such properties likely to cushion price decreases: Analysts
Published on May 12, 2014 1:40 AM
By Melissa Tan
A SEVERELY limited supply of landed homes may help their prices hold up better this year compared with condominiums.
Analysts say although landed home prices have fallen over the past few quarters owing to generally poor market sentiment, the segment's slowdown could ease off this year and even bottom out.
They tip landed home prices to fall by 2 to 6 per cent this year, less than the 5 to 8 per cent tumble predicted for the overall private property market.
"Genuine landed home buyers could come back in the second half of this year as prices bottom out," said Mr Jeffrey Hong, chief executive of real estate firm GPS Alliance. "The current situation offers them a window of opportunity to get into the market."
Mr Hong said that buyers may be able to pick up bargains in suburban areas such as Bukit Batok, Loyang, Jurong and Sembawang.
Although landed home prices fell in tandem with the overall housing market in the first quarter this year, their decline was gentler.
Landed home prices slid 0.7 per cent in January until March from the preceding quarter, the Urban Redevelopment Authority said last month. Overall, private home prices dropped 1.3 per cent in the same period.
The decline in landed home prices in the first quarter was also smaller than their 1 per cent fall in the fourth quarter last year.
Analysts said that the scarcity of landed homes in Singapore would likely cushion their price decreases.
Terraced houses, in particular, may see more demand since their overall prices tend to be lower than those of semi-detached houses or bungalows, they added.
SLP International research head Nicholas Mak noted that landed homes make up a mere 3.2 per cent of the estimated 76,300 private homes that are expected to be completed between this year and 2017.
"This indicates that the prices of landed homes could increase rapidly again when property prices recover in the future."
Mr Hong also noted that some landed properties could be acquired for redevelopment into cluster housing or apartments, meaning that landed housing could get rarer.
Government land sale sites zoned for landed housing are very rare, he added.
Mr Mak observed that landed home prices have historically tended to be "more robust" than non-landed home prices.
Their prices climbed more compared with that of non-landed homes during the property market boom from the second quarter of 2009 to the middle of last year, he said.
"The strong price growth of landed homes was partly driven by the arrival of new rich immigrants," Mr Mak said.
"Some of them became Singapore citizens which qualified them to buy landed homes."
The boom ended after tough home loan restrictions were imposed in June last year, capping the sum that buyers could borrow to buy property.
But even after that, landed home prices fell less than non-landed home prices from October last year to March this year, Mr Mak said.
Analysts noted, however, that landed home rentals could weaken further.
"Landed homes typically do not command a good rental yield (unlike) most condos," Mr Hong said.
He tips that rents could fall 5 to 8 per cent this year.
[email protected]