Strong buying sentiment filtering down to mass market homes: expert

By Loh Kim Chin, Channel NewsAsia | Posted: 21 March 2007 2207 hrs

The Centris

SINGAPORE : There are signs that the increase in private home prices is filtering down to the mass market, according to the latest report by property consultancy Jones Lang LaSalle.

It said resale home prices climbed 9.5% in the first quarter from the previous three months, making it the fastest pace of growth in seven years.

According to Jones Lang LaSalle, prices of homes in the secondary mass market saw a healthy recovery with prices averaging around S$460 per square foot in the first quarter of the year.

That was a 9.5 percent jump from the previous three months, boosted mainly by the robust economy and confidence in the housing market.

Jones Lang also cited the high year-end bonuses given out in some sectors of the economy as a reason for the climb.

And it noted that non-HDB upgraders account for a substantial part of the sales in the mass market.

"Based on our research, we notice that the demand right now is coming mostly from private buyers from the private residential market, unlike the previous peak when the demand was mostly driven from the bottom - HDB upgraders," said Chua Yang Liang, head of Research (South Asia) at Jones Lang LaSalle.

Jones Lang LaSalle said recent mass market projects such as The Centris, Yew Tee Residences and ClementiWoods have attracted a good number of local buyers.

Speculative buying remains comparatively low within the mass market, accounting for 4.3 percent of total transactions.

This was compared to the 39 percent recorded in the second quarter of 1995 when property speculation was at its highest.

Jones Lang is expecting the increase in activity in the mass market to continue into the next three months.

"We are looking at the mass market to continue to show strong recovery at least for the first half of this year. We anticipate another 2 to 3 percent quarter-on-quarter growth into the first half of 2007," said Chua.

With an anticipated increase in prices, market watchers are expecting more developers to launch projects targeted at the mass market in the coming months. - CNA /ls