The Business Times
By Emilyn Yap
2,900 landed units or 2.9% of all new private homes were launched in the first 9 months of 2010
Clipped lawns and personal car porches look set to become even rarer as the share of landed homes in Singapore declines.
Nevertheless, interested buyers may do well to wait a while longer before making a purchase. Measures introduced last week to cool the property market have raised the spectre of price falls in the sector.
According to Savills Singapore, some 2,900 new landed housing units were launched in the first three quarters of last year, accounting for 2.9 per cent of all the 99,200 new private homes rolled out in that period.
This proportion has dropped from 8.2 per cent in 2000. Of the 52,700 new private homes launched that year, 4,300 were landed.
‘The drop in landed home launches could be due to less landed land supply from the government in recent years,’ said Savills executive director for investment and prestige homes Steven Ming.
Just three sites slated for landed residential developments have been put on the confirmed and reserve lists since the start of last year, he pointed out.
Savills’ data add to evidence about the shrinking proportion of landed homes in Singapore.
Credo Real Estate said recently that landed homes accounted for just 27.2 per cent of all private housing units in the third quarter last year – an 8.1 percentage point drop from 35.3 per cent in the first quarter of 2000.
In absolute terms, the number of landed homes has increased over the same period, but at a slow pace.
While the stock of landed homes rose by over 4,000 units in the last 10 years, the stock of non-landed homes jumped by more than 60,000 units.
Landed home prices surged 24 per cent in the first three quarters of 2010, and the limited supply of such homes was said to be a cause for the rise.
‘In the growth of any city, you have more and more intensive land use . . . The government is also encouraging higher land productivity. This trend will only continue,’ said DTZ executive director (consulting) Ong Choon Fah.
There is also the demand factor. When home seekers look at the high per-square-foot (psf) prices for new non-landed apartments nowadays, landed homes seem to offer better value, Mrs Ong said.
For instance, a condominium unit at Terrene at Bukit Timah went for $1,298 psf in October last year, but a semi-detached house at Burgundy Hill in nearby Bukit Batok changed hands at $612 psf of land area.
Consultants had expected landed home prices to continue climbing this year until the latest property market curbs came along.
The measures include an increase in the seller’s stamp duty for private homes to as much as 16 per cent, and a cut in the loan-to-value (LTV) limit on housing loans to 60 per cent for individuals with one or more outstanding housing loans.
There will be ‘uncertainty and hesitation in the general market’ and the landed property sector is likely to be affected as well, said Credo executive director Ong Teck Hui.
‘If buying sentiments recover, it may be possible to see a mild price upside in 2011. However, if sentiments do not improve, a slight price downside is possible.’
Mr Ming expects the cooling measures to remove some demand – landed home buyers are likely to be servicing another residential mortgage loan and few of them will have idle cash for a 40 per cent down payment.
‘Volumes are expected to come off. As for prices, when that of the wider residential market corrects, the same can be expected of the landed segment, although probably of a smaller magnitude,’ he said.
Nevertheless, Mr Ong believes that fundamentals underpinning demand for landed homes are still favourable.
For instance, the job market remains strong, interest rates are low, and there are genuine buyers looking to upgrade, he said.