Taking the first 10 months of the year as a measure of comparison, the number of landed properties sold this year is 50% more than that in 2016.
Pent-up demand one of the factors for the increase
2017’s gradual and general recovery of the real estate market has pulled many a segment up in terms of sales volume. Home prices across the board has declined since the 2013 peak, but Q3 reflected some signs of recovery.
Strong buying activity in the third quarter firmed up prices. Prices of landed properties have fallen since its peak in 2013 to attractive and competitive levels. This could have accounted for the unleashing of pent-up demand for landed homes. 1,513 landed homes were sold between January and October this year. 1,009 units were sold in the same period last year. The transacted values also increased from $4.3 million to $6.1 million.
Landed home ownership considered a step up in housing hierarchy
Property analysts are noticing a rise in the number of buyers who have waited for the past 2 years to enter the landed home market. For many of them, owning a landed home is aspirational, at least housing- and lifestyle-wise. The scarcity of properties in this sector could be one of the few reasons for this desire. Though there are many other costs such as construction, renovation, maintenance, property taxes and stamp duties which have to be taken into account when purchasing a landed property.
The large price differential over the past 15 quarters could be another reason for the keen buying in Q3. Between Q4 of 2013 and Q2 of 2017, landed home prices have contracted 16%. Non-landed private home prices fell 10.2% in the same period.
Landed home prices have began to stabilise in July and August this year. In September and October, prices inched up 2% to 3%. Prices of landed homes are expected to rise a further 5 to 7% by the end of next year.