Residential capital values in the resale market for private condos continued to increase on the back of encouraging volume of sales in the second quarter of 2010, said property consultancy group Jones Lang LaSalle (JLL).
JLL said estimates showed that the growth in Q2 was led by central and prime capital values, which registered 7.6 percent and 8 percent on average.
Average capital value for prime properties reached $1,350 psf, surpassing the previous peak for the first time.
Luxury prime properties saw an average capital value of $2,500 psf, which is about 8.4 percent lower than the previous peak.
An improvement in rental income also supported the growth.
Prime rentals have seen a 10.8-percent increase on average in the first half of 2010. The growth has been supported by increased leasing demand from expatriates in the petrochemical and financial sector, said JLL.
With regard to sales volume, 3,127 caveats were lodged in the resale market in the second quarter based on initial data released by the URA.
Jones Lang LaSalle noted that the Chinese are the most resilient buyers amid moderating foreign demand due to uncertainties emanating from the eurozone debt crisis.
Chinese buyers accounted for 18.5 percent of caveats lodged by foreigners in the secondary market in Q2 2010, an increase of 6.2 percent in Q1 2007, it said.
It added that high net worth individuals from China may turn to Singapore as prices of luxury homes in the country are about ten percent below the previous peak and 24 percent below that of Hong Kong, making Singapore properties more attractive.
However, Dr. Chua Yang Liang, head of Research for Southeast Asia at JLL, said the resale market is likely to see another slowdown in both price growth and transactional volume in the second half of the year, after cues from the primary market, which has recorded lower sales volume and fewer project launches in recent months.