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Property market showing signs of life

This article is more than 12 months old

With residential prices falling, sales volume has been rising

At first glance, Singapore's broader property market appears gloomy, with vacancy rates in offices and malls climbing and residential prices falling.

But analysts say markets in various sectors are showing signs of life with increased office investments, robust luxury residential sales and a rejuvenated collective sales market.

Still, one of the starkest signs of gloom has been the fall in private home prices.

Private home prices have sunk 10.8 per cent in 12 straight quarters. Rents have dropped by 10.7 per cent, Urban Redevelopment Authority data shows.

However, the sales volume has been rising. A total of 11,993 private residential units (excluding executive condominium) were sold in the first nine months this year, an increase of 9.8 per cent year on year.

Falling prices have, in fact, been a boon for the luxury residential property market.

As of Dec 15, there had been 2,601 private home transactions in the "core central region", 42.6 per cent higher than that of last year, said Savills Singapore research head Alan Cheong.

The area includes Orchard, Bukit Timah and Novena.

"This shows there has been a strong revival of interest in the luxury segment of the private residential market," he said.

He attributed this to developers' creative payment schemes, such as OUE Twin Peaks' deferred payment scheme.

Analysts singled out the return of collective sales as cause for optimism. Three deals were sealed this year racking up more than $1 billion in value. Last year, there was one $380 million deal and none in 2014.

The biggest collective sale of the year was of Bishan estate Shunfu Ville, bought by Chinese developer Qingjian Realty for $638 million. The sale is awaiting High Court approval.

Dr Lee Nai Jia, head of research at Edmund Tie and Company, is confident more sales will be sealed next year.

"This is because sellers have dropped asking prices, while developers are keen on well-located smaller sites," he said.

However, the star performer was office investment sales.

Data from research firm Real Capital Analytics shows the value of office investments here so far this year was US$4.9 billion as of Dec 14, rising 54 per cent from the same period a year earlier.

For more, read The Straits Times today.