Tuesday, April 2, 2013

Property curbs slow investor demand for city fringe homes

The Straits Times  |  APRIL 02, 2013

January's property curbs seem to have been effective in dissipating investor demand for city fringe apartments.

Prices for these homes, many of which are smaller in size and popular with investors, have been flatlining since the measures kicked in.

Non-landed home prices for city fringe areas posted zero growth compared with a 0.9 per cent increase in the final quarter of last year, according to fresh data from the Urban Redevelopment Authority yesterday.

City centre apartments posted a marginal 0.4 per cent price gain and suburban homes lodged a 1.7 per cent rise.

Experts say that the cooling measures have decelerated investment demand.

The measures include higher stamp duty for those buying investment homes and tighter rules limiting how much they can borrow.

Mr Nicholas Mak, head of research at SLP International, noted that home prices in the region posted a rise of less than 1 per cent every quarter from the April to December period last year.

"The flat growth in the first quarter of 2013 illustrates that residential capital values in this segment are likely to continue facing slow growth and even an occasional contraction in the months ahead," he added.

This is because a significant proportion of the residential projects offered for sale in the city fringe in the January to March period was targeted at investors, added Mr Mak.

These could include Echelon next to Redhill MRT station, SeaSuites in Pasir Panjang and Spottiswoode Suites near Outram MRT station.

All three projects have a significant number of one- and two- bedroom units which are typically bought by investors.

Ms Alice Tan, senior manager of consultancy and research at Knight Frank Singapore, agreed that many investors are taking a wait-and-see approach on the back of the curbs.

She added, however, that city fringe prices might see an upturn as buyer interest could re-enter the segment on the back of the buoyant suburban market in recent months where thousands of new homes have been snapped up.

City fringe areas include Balestier and Thomson in the Novena planning area and the Outram and Rochor planning areas.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)
Email: marshe_inc@yahoo.com.sg

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