Smaller units are poised to enjoy healthier take-up rates.
Singapore’s dismal residential property market is expected to receive a boost from first-time buyers and displaced owners looking for replacement homes as the dust settles following the government’s cooling measures in July, according to a report by Edmund Tie & Co.
Local home buyers held back on their property purchases and turned to cheaper condo projects in Q2 with 40.5% of property purchases settling within the range of $1m to $1.5m, data from ET & Co show, after the Additional Buyers Stamp Duty (ABSD) rates for individuals was hiked by 5 ppt for individuals and 10 ppt for entities and the Loan-to-Value limits were tightened by 5 ppt.
Correspondingly, the proportion of home purchases priced $2m and above declined from 20.7% in Q2 2017 to 14.7% in Q2.
However, foreigners and high-networth individuals remained undeterred in snapping up homes in Singapore in Q3, according to a report from Orange Tee & Tie, with six ‘super luxury’ homes or properties priced $10m and above sold even after July’s property curbs.
Demand for condos worth $3m and above also remained robust at 187 units compared to the five-year average of 173 units despite the double-digit decline of luxury condo transactions in CCR.
“The robust demand for pricier luxury homes suggests that Singapore remains a top investment destination amongst high net worth individuals (HNWI) and affluent foreigners,” OrangeTee & Tie head of research and consultancy Christine Sun said in a report.
ET & Co adds that the revision of guidelines which saw the increase in minimum average unit size from 70 sqm to 85 sqm and 100 sqm in select nine areas is expected to put the spotlight on smaller housing units in the near term.
“As such, developers of upcoming launches will be expected to focus on selling the smaller units, which are generally popular with investors and young families who have lower capital outlay,” the firm added.
However, large developments or those with over 1,000 units are also expected to launch in the upcoming quarters which will provide buyers with a variety of choices. This includes a project by UOL Group, UIC and Kheng Leong Company in Silat Avenue which provides 1,101 units; Parc Esta in SIMS Avenue which could yield 1,399 units and The Florence Residences in Hougang Avenue 2 which could provide 1,410 units.
Similarly, a project by Kingsford Development in Normanton Park and Treasure at Tampines in Tampines Street 11 is expected to yield 1,882 and 2,225 units respectively.
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