Source: The Business Times, 12 July 2007
The prices of landed property have started rising - and this time the pace is being set in locations such as Pasir Ris, Toa Payoh and Clementi.
Data from Savills Singapore show that prices of landed property have climbed by between 8 and 91 per cent across most districts in Singapore from the second quarter of 2005. That is when this segment of the market first started stirring.
And while landed property in the traditional prime districts of 9 and 10 grew at a fast clip from the second quarter of 2005 to the second quarter of 2007 - increasing by 55 per cent and 58.5 per cent respectively - prices in non-prime districts 5, 12, 18 and 21 registered even bigger climbs.
Market watchers said that landed home prices in the non-prime districts are growing from a smaller base and so are seeing faster growth.
Savills?data shows that landed property prices in district 18 - consisting of Pasir Ris, Simei and Tampines - grew the fastest, increasing by 90.9 per cent over the last two years. Landed homes in the area are now going for about $490.50 per square foot (psf), up from $257 psf in the second quarter of 2005.
Similarly, prices in district 12 (Balestier, Moulmein, Novena and Toa Payoh) have climbed by 74 per cent over the past 24 months, while prices in district 21 (Clementi, Upper Bukit Timah and Hume Avenue) grew 66.5 per cent. In district 5 (Buona Vista, Dover, Pasir Panjang and West Coast) prices rose 64.2 per cent over the last two years.
In just the past one year, prices in districts 8, 13 (Potong Pasir and MacPherson) and 18 have seen price climbs of more than 40 per cent.
It is not surprising that landed homes in non-prime districts are seeing faster price climbs as they are starting from a lower base,?said Knight Frank's director of research and consultancy Nicholas Mak. Prices in the good class bungalows (GCB) market started to stir in 2004, even before prices of non-landed luxury homes started climbing. As most GCBs are in districts 9 and 10, their prices are already quite high, which means that their price growth is likely to be slower.?lt;/FONT>
By contrast, landed home prices in districts 5, 12, 18 and 21 are just starting to move, driven partly by homeowners looking for new properties after selling their non landed homes in collective sales, market watchers said.
Analysts also attribute the growth in landed property prices to quantifiable factors such as developers selling rebuilt landed homes as well as the rising land and construction costs.
Starting from around mid-2004, certain individuals and developers have been buying landed homes around the island, reconstructing them and then selling them,?said Savills Singapore's director of marketing and business development Ku Swee Yong. The higher selling prices are partly due to the value-add.?lt;/FONT>
Construction costs for landed property, for example, have climbed to around $300 psf, from about $150 two years ago.
About half of the price increase for landed homes can be attributed to such factors, while the rest of the hike is probably due to market sentiment, Mr Ku said.
Growth of landed property prices still lag non-landed homes mainly because of a lack of foreign investment, analysts say. Under Singaporean law, foreigners are not allowed to buy landed properties without special permission. Prices of luxury condominium units here have set consecutive records over the last year - and a lot of it was thought to be fuelled by foreign money.
Prices of landed properties haven't moved as much because the market is limited to locals,?said Mr Ku. The value of landed property is also very subjective - a potential homeowner might not want to pay for a house if it faces the wrong direction, for example.
Going forward, the limelight will still be on non-landed property because of the foreign participation? said Mr Mak. There is a possibility that landed property (prices) could move faster, but I don't think they will climb as quickly as high-end condos,?he said.
No comments:
Post a Comment