Private residential market continues to rise in Q2

Property consultancy Jones Lang LaSalle said residential capital values in the resale market for the private condominiums continued to rise on the back of encouraging sales volume in the second quarter of this year.

The firm said estimates showed that the prime and central capital values led the way in the quarter’s growth by registering 8 per cent and 7.6 per cent on average.

The prime market saw average capital value for typical prime properties reaching $1,350 per square foot, surpassing the last peak for the first time.

Average capital value for luxury prime properties reached $2,500 per square foot, which is some 8.4 per cent below the last peak.

The growth has also been supported by an improvement in rental income.

Prime rentals have grown by 10.8 per cent on average, over the first half of this year.

Jones Lang LaSalle said this is supported by increased leasing demand from expatriates in the financial and petrochemical sectors.

In terms of sales volume, 3,127 caveats were lodged in the resale market in Q2 based on preliminary figures from the Urban Redevelopment Authority.

Jones Lang LaSalle noted that Chinese buyers are the most resilient amidst softening foreign demand due to uncertainties arising from the eurozone debt crisis.

It said Chinese buyers accounted for 18.5 per cent of caveats lodged by foreigners in the secondary market in the second quarter of 2010, up from 6.2 per cent in the first quarter of 2007.

It added that high net worth individuals from China may turn to Singapore as luxurious home prices are around 24 per cent below that of Hong Kong and 10 per cent below the last peak.

This makes Singapore properties comparatively more attractive.

But Jones Lang LaSalle’s head of Research for Southeast Asia, Dr Chua Yang Liang said the resale market is expected to see a further slowdown in both transactional volume and price growth in the next half of the year, following cues from the primary market, which has seen fewer project launches and lower sales volume in recent months.

Source: Channel News Asia, 5 Jul 2010