Sales
in the private residential market could fall by more than 25 per cent next
year, as a result of local buying fatigue from the many new launches over the
past years and increasing home completions.
This
would mean that from the record breaking 20,000 units sold in the past 10
months of this year, transaction numbers are likely to hover between 16,000 and
18,000 next year.
Prices,
however, are expected to continue their upward trend, in line with rising land
costs and demand from overseas investors.
The
average unit price of luxury condos in Singapore posted a second quarterly rise
of 2 per cent quarter on quarter (q-o-q) from $2,350 per square foot (psf) to
$2,395 psf in the fourth quarter of 2012.
For
the full year of 2012, luxury condo prices have risen 5 per cent from $2,286
psf in Q4 2011, but are still 4 per cent lower than the peak price of $2,495
psf in Q4 2007.
Given
the rising trend, market analysts expect a price increase of about 10 to 15 per
cent for mass-market non-landed properties, while luxury properties may rise by
about 3-5 per cent.
The
report also highlighted that quantitative easing in the United States could see
liquidity flowing into Asian economies such as Singapore in search of a safe
haven and currency appreciation. Coupled with rock-bottom interest rates that
are likely to remain low next year, some fresh external demand can hence be
anticipated.
Although
an influx of new demand can be expected, the purchases made by overseas buyers
are likely to be kept at modest levels, owing to the Additional Buyer's Stamp
Duty (ABSD).
The
percentage of purchases made by non-permanent residents remained low at 7 per
cent in Q3 this year and 6 per cent in the first half of Q4.
This
was significantly lower than the 20 per cent recorded in Q4 last year, before
the implementation of the ABSD.
Additionally,
the strong affinity towards executive condominium (EC) developments is likely
to continue given the confident sentiments among EC buyers.
Close
to 3,500 EC units were snapped up in the first 10 months of this year and this
number is expected to reach 4,000 once three more EC developments -
CityLife@Tampines, The Topiary and Forestville - are launched before the year
ends.
This
will surpass the 3,935 ECs sold in 2010 and 2011 combined.
The
report also noted that demand for shoebox units declined in the fourth quarter
of this year to a low of 7 per cent from its three-year peak of 21 per cent in
the third quarter of 2011, a possible result of government curbs.
Although
these new measures, which require developers to build homes with a prescribed
average unit size of between 500 sq ft and 700 sq ft, will curb the growing
number of shoebox units, it could in turn heighten the median prices of these
small-format homes.
Prices
of shoebox condos sized below 500 sq ft have already risen for three
consecutive quarters to a high of $1,474 psf in Q4 this year. This translates
to increases of 6 per cent q-o-q and 10 per cent y-o-y.
Source: Business Times –12 December 2012
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