Strong demand in high-end segment in 3Q, says DTZ

Demand for landed housing was strong in 32Q2012, according to DTZ Research in its Property Times report released on Nov 19. Landed homes above $5 million were particularly strong, and there were more Good Class Bungalows (GCBs) and Sentosa Cove (below) houses purchased in 3Q than in 2Q. For instance, the number of private homes in Sentosa Cove purchased by Singaporeans in 3Q rose 56% q-o-q to 14 units, the highest number since 42Q2010. So far this year, Singaporeans have bought a total of 24 units in Sentosa Cove, of which 18 are condominiums.

There was also an increase in purchases by Americans and Norwegians in Sentosa Cove after the implementation of the additional buyer’s stamp duty (ABSD) last December, as both the US and Norway, along with Switzerland, Liechtenstein, Norway and Iceland, have free trade agreements with Singapore and buyers of these nationalities are therefore not subject to the 10% ABSD for residential property purchases. For instance, Americans have purchased 10 private homes in Sentosa Cove this year, in contrast with just one last year and three in 2010. All 10 properties purchased were private condos. Similarly, Norwegians bought four properties in Sentosa Cove, all private condos, compared with just one purchase last year and none the year before. As a whole, Americans bought a total of 126 private homes in the first nine months of the year, versus 129 last year. Similarly, there were more Norwegian purchases this year — with a total of seven in the first nine months of the year, two more than last year.

While foreign demand fell, the prime condo segment continues to be supported by local buyers despite the latest cooling measures on loan tenures and the loan-to-value limit implemented in October, according to DTZ.