Luxury condo prices up 17% from Q1; new peak for prime area landed homes
Latest figures from DTZ show that prices of completed landed and non-landed private homes in various segments continued to recover in the third quarter after bottoming out in the first quarter of this year in the aftermath of the global financial crash.
One of the strongest price gains was reflected in the average price of freehold completed prime district condos, which rose 22.3 per cent from the recent low of $1,120 per square foot in Q1 to $1,370 psf in Q3. ‘As more buyers were drawn to the market, average private home prices continued on the uptrend in Q3 2009, led by smaller homes in the prime districts of 9, 10 and 11,’ DTZ said.
The average capital value for DTZ’s basket of completed luxury freehold condos rose 17 per cent from $1,880 psf in Q1 to $2,200 psf in Q3; however, the latest figure is still 21.4 per cent shy of the all-time high of $2,800 psf in late 2007/early 2008.
The recovery in home buying and prices in Q2 and Q3 this year also rubbed off on the landed housing segment. The average price of completed freehold landed homes in prime districts 9, 10 and 11 appreciated 15.9 per cent from the recent low in Q1 to scale a fresh peak of $1,383 psf of land area in Q3, according to DTZ’s data.
In the 99-year suburban landed market too, the average capital value of $593 psf as at Q3 was up 9.4 per cent from Q1.
DTZ’s landed housing baskets exclude Good Class Bungalows, whose values have also appreciated. And for both landed homes as well as condos, its baskets cover only completed projects.
‘We’ve seen strong interest in landed properties in Q3 – whether it’s bungalows, terrace houses or semi-detached homes. Buyers are mostly owner occupiers,’ says DTZ SE Asia research head Chua Chor Hoon.
‘The general home buying sentiment has spilled over to the landed segment. Landed property prices did not move up as much as condo prices in the 2007 run-up.’
A universal trend for all types of private housing shown in DTZ’s data is that prices have been appreciating since bottoming out in Q1 this year.
However, while the average quarter-on-quarter price gains for suburban condos were higher for Q3 than for Q2, the price appreciation slowed in Q3 for prime district and luxury condos.
The average capital value of freehold suburban condos rose 5.6 per cent in Q3 over the preceding quarter, after posting a 3.1 per cent quarter-on-quarter gain in Q2. For 99-year suburban condos too, the average price increased 6.5 per cent in Q3 to $610 psf, nearly double the 3.2 per cent increase in Q2.
Quarter on quarter, the average capital value for prime district freehold condos surged 11.3 per cent in Q2 and 9.9 per cent in Q3. The average price of luxury freehold condos appreciated 9.6 per cent in Q2 and 6.8 per cent in Q3.
DTZ said rental values found some stability after four consecutive quarters of decline. ‘The average monthly rental value of non-landed homes in prime districts was unchanged at $3.32 psf in Q3 2009 while that of luxurious condos stayed at $4.65 psf.’
Over the next six months, Ms Chua predicts, private home prices are likely to see some level of stabilisation with more moderate increases. While sentiment is still strong at the moment, she pointed to an easing in sales volume from frenzied levels seen in Q3 on the back of fewer projects in the pipeline as well as the market cooling measures announced by the government on Sept 14.
DTZ noted that new private home sales by developers in Q3 are poised to break the previous quarterly record of 5,129 units set in Q2 2007. This was after developers sold a total of 4,471 homes in July and August alone. The full-year figure is also expected to top 2007’s record of 14,811 units.
Source: Business Times, 30 Sep 2009