Despite the softer real estate market, landed properties remain rare and in demand, particularly in land-scarce Singapore. Would this then be a good time to invest in one in preparation of a market recovery? How will the value of landed properties hold up in tough times?In terms of availability, as of Q4 of 2016, only 1,352 new landed residential properties will be built by 2021. Sales volume for landed homes have also risen by 0.8 per cent in the last quarter of 2016. That said, the landed property market is recovering more quickly than expected. And perhaps despite sentiments of a flailing sector, sales figures have shown that the number of homes sold last year was close to that in 2013. The number of private homes sold overall have shown a 30 per cent dip from 2013.
The Total Debt Servicing Ratio framework implemented in 2013 has had some impact on the market, overall with landed residential property price index falling 14.1 per cent, likely due to the high stamp duties and price quantum. The demand for freehold landed properties have remained strong with prices of such properties in prime districts falling only 6.6 per cent. Most of the price decline came from leasehold terraces in non-prime districts and in the secondary market.
Freehold landed homes in or near the Central Region will continue to be popular amongst buyers and investors this year due to their accessibility, scarcity and potentially higher capital returns. Property analysts do however caution buyers to think beyond location and accessibility. Other factors such as growth prospects of the area, development potential in the surrounding township and rebuilding and construction costs should also be taken into serious consideration before closing the deal.