The gap between landed and non-landed property prices has narrowed in psf terms over the past two years, according to analysis by a real estate company.
As of end March 2009, detached, semi-detached and terrace houses transacted at discounts of 38, 36 and 23 percent respectively, as compared to non-landed units in psf terms.
While the gaps narrowed by end 2010, landed homes are still transacting at more substantial discounts than non-landed homes, with detached, semi-detached and terrace houses transacting at discounts of 26, 30 and 14 percent respectively.
The Urban Redevelopment Authority (URA) price index for landed properties increased 30.8 percent in 2010, while the sub-index for bungalows or detached houses surged 37.6 percent.
Meanwhile, the index for non-landed private homes saw a slight increase of 14 percent in 2010, said the URA last month.
Prices of landed homes are escalating on the back of increasing demand, due to the lifestyle needs and demographic changes of the Generation X-ers, or those born in the 1960s and 1970s, said real estate consultancy firm International Property Advisor.
“Based on the instructions we have been receiving from our clients, the demand for landed properties is strengthening,” said Ku Swee Yong, CEO of International Property Advisor.
Going forward, Steven Ming, Executive Director for Investment and Prestige Homes of Savills Singapore, said the gap between landed and non-landed home prices will likely narrow further, provided that economic fundamentals stay intact and continue to boost demand for landed properties.
However, prices for non-landed and landed properties will likely rise at a more measured pace in 2011 than in 2010, said analysts.