For the past five years, the supply of landed property in Singapore has been limited. In 2018 the expected transactions for landed projects are approximately 300 units. CBRE anticipates that most units will be sold outside Core Central Region according to the research they carried out. CBRE also believes that leasehold projects will have a lower value compared to freehold projects.
Landed Property at Core Central Region
During the PropertyGuru’s seminar, one of the concerns was the potential of investments in landed housing. The ability of investors to maintain the value of properties is also in question. The speakers at the Guru Talk seminar were Jacinta Pillay, Joseph Tan, and Kevin Lim, chief agency director at ERA Realty. Tan began by giving a summary of the private residential market in 2018. He cited that 380,000 housing units had been offered. He also noted that landed properties were only 1.5 percent while non-landed properties consisted 98.5 percent.
Private Residential Project at Core City Centre Condo Increasing
Of the landed properties 90 percent were freehold while 10 percent were leasehold.Tan further said that non-landed homes cost between one million dollars and two million dollars. Most Singaporeans preferred non-landed homes while investors preferred landed housings. He went ahead to say that unsold landed homes had dropped from 552 units in December to 300units in March.
According to the price index at URA prices of landed housings had peaked at 179 percent before dropping by 15 percent in 2017.Jacinta Pillay commented that one of the often used approach approaches used to buy property is de-coupling. De-coupling refers to removing the owner’s name from the property in existence. For example, if a married couple wants to buy property and wish to avoid extra Additional Buyer’s Stamp Duty, either of them can remove their name from existing property. To de-couple, the couple can either use part sale or gift transactions. The most common type of de-coupling is the fractional sale.
Factors for Increase in Condo Pricing
In fractional sale, the property has an existing mortgage sale and is encumbered. Whoever wants part of the property will be required to purchase it.Pillay also mentioned regulatory differences between purchasing landed property from resale market and a developer. By 2030, Singapore’s population is expected to be at 6.9 million. Current statistics indicate that each household has 3.5 people. With the increase in population demand for housing units is expected to increase by 26,429 housing units.
Demand for houses will be more hence there will be no oversupply in the market. A rise in sales is expected in 2018 in en bloc transactions by 33 percent. Those who bought a unit during the event were offered with savings of not less than 30,000 dollars.