Demand for landed homes in Singapore is expected to become hotter this year with the number of sales transactions likely to exceed the 2,892 units sold in 2009.
In Q1 2010 alone, more than 1,500 landed homes, excluding good class bungalows, were sold. They were worth around S$3.2 billion, compared with S$5.2 billion for the whole of last year.
Several property agencies expect more interest in landed homes. For instance, HSR said that sales of landed homes have increased by about 10 percent from January to April 2010.
While landed homes can fetch lucrative rentals, they are seen as safer bets during market uncertainty, it said.
“Rental yields for 2009 and even now, a corner terrace for example over in East Coast area, the rate is running perhaps between S$6,000 to S$9,000 compared to a year and a half ago, 2008, the rental is about S$3,500 to S$4,000,” said Mr. Jeffrey Hong, agency executive director of HSR International Realtors.
According to Colliers International, there were 498 units were transacted in March – just 17 percent lower than the peak in May 2007.
During the first quarter, the average unit price was S$826 psf for terrace houses, S$988 psf for detached houses and S$812 psf for semi-detached houses.
Some homebuyers choose landed homes as their average prices are comparable to those of private condos.
Miss Grace Ng, deputy managing director for Agency & Business Services at Colliers International, said: “If you look at the last bottom, that’s 2Q 2009, landed property prices have recovered by about 35 percent. If you compare with the last peak in 2Q 08, landed property prices have surpassed the last peak by about 9 percent.”
Colliers added that landed properties are considered by several buyers as offering more value for money, as they would own a land parcel with their home. There is also a perception that landed homes are a good shield against inflation.
Colliers expects that demand in the near term will remain firm, backed by the improving job market, high liquidity and low interest rate environment.
HSR said that the highest volume of transactions recorded last year was seen in District 19, followed by District 15.
There were over 600 deals done in District 19, including areas like Yio Chu Kang, Kovan, Serangoon Gardens and some parts of Hougang. District 15 – comprising the East Coast, Joo Chiat and Katong – recorded about 400 transactions in 2009.
This year, market players expect both districts to do well again, together with the Bukit Timah area.
Going forward, market players said that prices are unlikely to be subjected to volatile swings given the limited supply of landed properties. Altogether, there are about 68,000 landed homes in Singapore, accounting for around nine percent of the total stock of private residential properties in the country.
Landed homes led the property price growth in Q1, climbing 8.3 percent, and analysts expect the trend to continue for the rest of 2010.