Prices of luxury residential properties in Singapore have moderated to 0.9 percent quarter-on-quarter in the first quarter, due to the property cooling measures, according to the CB Richard Ellis (CBRE) Asian Luxury Residential Capital Value Index.
The cooling measures, which took effect in Q1, included the higher seller’s stamp duty (SSD) and a decrease of credit availability to those who already have outstanding home loans.
Rents remained unmoved but seemed to reveal signs of softening towards the end of the quarter, together with the slowdown of expatriate leasing demand.
The data also revealed that the index rose 5.5 percent quarter-on-quarter in the first quarter, up from the 0.9 percent recorded in the last quarter.
However, most markets, including Shanghai, Beijing and key Southeast Asian cities, registered a lower price growth rate as sales slowed, following the announcement of measures directed at cooling the housing markets.
Guangzhou and Hong Kong were the only markets to experience accelerated quarter-on-quarter growth of luxury residential prices.
“Home buying demand is expected to remain healthy as the regional economy continues to expand. The cooling measures introduced in a number of major markets will moderate price growth of luxury residential property over the course of the year,” said Anton Eilers, Executive Director at CBRE Residential for Asia.
“Prices and rental growth in most South East Asian cities are expected to remain stable.”
Overall prime rents in Asia continued to trend upwards in Q1 2011 and the CBRE Asian Luxury Residential Rental Index grew by 2.3 percent quarter-on-quarter.
“It will be more realistic to expect the luxury market to cruise along like it did in 2010. Although more foreign and permanent resident buyers have bought new properties in the prime residential districts in 2009-2010, the numbers were less than in 2006-2007, during the early stages of the development of Marina Bay as a global financial centre and the construction of the two integrated resorts,” said Joseph Tan, Executive Director for Residential.
“In the absence of similar government initiatives in 2011, we can expect minimal growth in both the inflow of foreign investors and home prices. As such, the volume of luxury transactions in 2011 is likely to be around 150-200 units with prices averaging at S$3,000 psf and S$3,500 psf for resale and new projects respectively (equating to a 5.0 percent–10.0 percent increase).”
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