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11-01-2013, 07:29 AM
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The Straits Times
www.straitstimes.com
Published on Jan 11, 2013
Private home prices set to rise further
Spike in suburban land costs may push selling prices upwards, says DTZ report
By Esther Teo Property Reporter
PRIVATE home prices may keep inching up this year after the cost of suburban land rose an average of 22 per cent last year from 2011, a new report said.
Developers jostled to replenish their landbanks and were prepared to bid aggressively to secure sites on offer, said the report by property consultancy DTZ.
This sharp rise in land prices may translate to some upward pressure on selling prices for future projects in the primary market, the report said.
"Nevertheless price increases will be capped by increased competition from other new projects as well as the substantial number of private home completions in 2013," the report added.
DTZ also noted that Chinese interest is returning to the luxury segment, as China's economy improves.
The number of Chinese buyers who bought private non-landed homes costing more than $5 million has increased significantly.
It went from 14 in the first six months of last year to 13 in the third quarter and 20 in the final three months of the year. These homes were in the traditional prime districts 9 and 10, the company's analysis showed.
Resale prices in the luxury segment dipped by 1.3 per cent last year after the imposition of the additional buyer's stamp duty in December 2011, DTZ noted. This came after a 1 per cent gain in 2011.
However, the fall was mainly in the first half of last year, and prices stabilised in the second half, as buyers returned to the market to look for value.
Ms Lee Lay Keng, DTZ's associate director of research, expects buying sentiment to be sustained, as mortgage payments remain affordable due to the low-interest rate environment.
The tight job market and rising Housing Board resale prices will also support demand from HDB upgraders, she added.
A record high of 20,879 new private units were snapped up from January to November last year, mainly fuelled by the supply of sites from the Government Land Sales (GLS) programme.
"We expect demand in the primary market to continue to be supply-led, as the Government continues to roll out new supply through the GLS programme," Ms Lee said.
New home sales this year could come close, but are not likely to exceed last year's figures.
This is because lower sales of tiny shoebox units are expected due to the Government's cap on the number of homes in non-landed private residential developments outside the central area.
DTZ added that increases in private-home prices were moderated last year, compared with the year before.
However, the landed-home segment still led the charge, with terraced homes posting the largest rise of 9.7 per cent.
Resale prices of leasehold condos were up 3.4 per cent last year - a slower pace than the 8.4 per cent gain in 2011.
The slowdown, however, was largely in the first half of the year. The pace of growth picked up in the third quarter, before accelerating further in the fourth, DTZ said.
esthert@sph.com.sg
The Straits Times
www.straitstimes.com
Published on Jan 11, 2013
Private home prices set to rise further
Spike in suburban land costs may push selling prices upwards, says DTZ report
By Esther Teo Property Reporter
PRIVATE home prices may keep inching up this year after the cost of suburban land rose an average of 22 per cent last year from 2011, a new report said.
Developers jostled to replenish their landbanks and were prepared to bid aggressively to secure sites on offer, said the report by property consultancy DTZ.
This sharp rise in land prices may translate to some upward pressure on selling prices for future projects in the primary market, the report said.
"Nevertheless price increases will be capped by increased competition from other new projects as well as the substantial number of private home completions in 2013," the report added.
DTZ also noted that Chinese interest is returning to the luxury segment, as China's economy improves.
The number of Chinese buyers who bought private non-landed homes costing more than $5 million has increased significantly.
It went from 14 in the first six months of last year to 13 in the third quarter and 20 in the final three months of the year. These homes were in the traditional prime districts 9 and 10, the company's analysis showed.
Resale prices in the luxury segment dipped by 1.3 per cent last year after the imposition of the additional buyer's stamp duty in December 2011, DTZ noted. This came after a 1 per cent gain in 2011.
However, the fall was mainly in the first half of last year, and prices stabilised in the second half, as buyers returned to the market to look for value.
Ms Lee Lay Keng, DTZ's associate director of research, expects buying sentiment to be sustained, as mortgage payments remain affordable due to the low-interest rate environment.
The tight job market and rising Housing Board resale prices will also support demand from HDB upgraders, she added.
A record high of 20,879 new private units were snapped up from January to November last year, mainly fuelled by the supply of sites from the Government Land Sales (GLS) programme.
"We expect demand in the primary market to continue to be supply-led, as the Government continues to roll out new supply through the GLS programme," Ms Lee said.
New home sales this year could come close, but are not likely to exceed last year's figures.
This is because lower sales of tiny shoebox units are expected due to the Government's cap on the number of homes in non-landed private residential developments outside the central area.
DTZ added that increases in private-home prices were moderated last year, compared with the year before.
However, the landed-home segment still led the charge, with terraced homes posting the largest rise of 9.7 per cent.
Resale prices of leasehold condos were up 3.4 per cent last year - a slower pace than the 8.4 per cent gain in 2011.
The slowdown, however, was largely in the first half of the year. The pace of growth picked up in the third quarter, before accelerating further in the fourth, DTZ said.
esthert@sph.com.sg
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