Mass market condos expected to lead demand for private homes
By Joanne Chan | Posted: 06 January 2011 1656 hrs
SINGAPORE : With private home prices at record highs, industry players expect developments catering to the mass market to lead demand this year.
They said Singapore property is viewed as good investment, but affordability will be key amid rising prices.
Singapore's growing economy and low borrowing rates have injected ample liquidity into the market.
Industry players said Singaporeans are looking to invest in what's seen as a safe and appreciating asset - property.
And with the HDB resale market largely closed off to private property owners, those looking for a second property to invest in are eyeing mass market condominiums.
Cooling property measures introduced on August 30 last year disallow dual ownership of private property and an HDB flat. So, a private home owner has to sell off his property first before he is allowed to buy an HDB flat.
Foreigners settling in Singapore will also drive demand for mass market condos - typically those going for S$1,000 or less per square foot.
"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... so a lot of them enter the mass market. They will buy condominiums near public schools and near public transportation," said Chris Koh, director of Dennis Wee Group.
Foreign investors who traditionally might have snapped up more expensive developments are also thinking twice.
"Going forward, 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," said Colin Tan, head of Research & Consultancy at Chesterton Suntec International.
Despite the property cooling measures introduced last August, the Republic is still widely seen by investors as a good place to park their money, compared to other countries in the region who 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 one to two per cent each quarter.
They said this is in line with Singapore's expected economic growth.
- CNA /ls
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