http://www.straitstimes.com/archive/...arket-20120926
Landed homes heat up property market
Buoyant Q3 for all segments except suburban leasehold apartments
Published on Sep 26, 2012
By Esther Teo Property Reporter
THE property market is building up steam again after a flat few months, with landed homes leading the charge.
Average resale prices of freehold landed homes in the prime districts rose 1.2 per cent this quarter, a touch up on the 1 per cent rise in the previous three months.
Suburban landed home prices gained 2.4 per cent, doubling the 1.2 per cent rise in the second quarter, with semi-detached and terrace home prices showing the way, according to an analysis by consultancy DTZ.
It found that other segments are also heating up. Prices of freehold apartments in prime districts 9, 10 and 11 and in suburban areas rose 1 per cent, about twice the increase they racked up in the second quarter.
Leasehold apartments in suburban areas were the only exception to the more buoyant market, with price gains slowing to 0.5 per cent in the third quarter from 0.6 per cent before.
Ms Chua Chor Hoon, DTZ head of Asia-Pacific research, said the stronger price increase in the freehold segment is due to the price gap closing between mid- and high-end units on the resale market and new units on the mass market.
"More buyers are finding that these resale units offer better value and generally have bigger floor areas than the new ones," she added.
Luxury home prices, which had been weakening over the past three quarters, also stabilised this quarter as local buyers streamed back into the market.
DTZ said the proportion of luxury home purchases by Singaporeans grew significantly - from 19 per cent for all of last year to 35 per cent so far this year. The rise indicates underlying demand from cash-rich locals waiting on the sidelines for more attractive pricing.
Ms Margaret Thean, DTZ's executive director of residential, noted that foreign and local buyers are slowly coming back.
"We expect to see more activity and interest in luxury housing in the next one to two quarters with a few projects gearing up for launch," she added.
Experts also weighed in on how the latest round of quantitative easing (QE3) in the United States could further fan the flames of higher prices.
More QE could give buyer sentiment a temporary shot in the arm, provoking a short- term reaction that might push prices up by 2 to 3 per cent, said Colliers International's director of research and advisory, Ms Chia Siew Chuin.
But the history of QE announcements and their impact on the Singapore residential market indicate that the effect is unlikely to last more than a couple of quarters before prices stabilise and flatten out, she added.
Ms Chia expects prices to edge up by 2 to 3 per cent over the next 12 months.
Savills Singapore research head Alan Cheong said that unless further "draconian policies" are introduced or mechanisms devised to counter the liquidity from QE3, prices are expected to continue rising for the rest of this year and next. He added that more QE could send interest rates and borrowing costs here down even further.
UOB Kay Hian analyst Vikrant Pandey said more cooling measures could be on the cards with a maximum loan-term cap a "likely measure in the near term".
"With QE3 in place, we believe the Government could carefully review banks' lending practices and come out with additional measures if necessary," he added.
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Originally Posted by land118
