Singapore’s resale capital values rose in the first quarter of the year, although more upward pressure was seen outside the prime districts in the Central and East Coast areas, according to preliminary estimates released by Jones Lang LaSalle (JLL).

According to the global real estate services firm, capital values in the Central and East Coast regions rose between 2.0 and 2.5 percent quarter-on-quarter, echoing the observations seen in the National University of Singapore (NUS) Housing Index. Average non-prime capital values are now at a record S$1,043 psf, exceeding the previous high of S$1,020 psf achieved in Q4 last year.

However, luxury prime properties saw only a 0.7 percent quarter-on-quarter growth in rental values, as leasing demand softened in the first quarter. Smaller units were the key factor behind this, with both two- and three-bedroom units seeing rental values soften over the quarter.

Meanwhile, four-bedroom units in the prime districts remain in demand and were the only type of homes to see an increase in rental values this quarter.

“The preference of the expatriate community is for larger four-bedroom apartments of at least 2,800 sq ft. The smaller size units are not particularly attractive as the majority of middle- and upper-management families relocating prefer spacious four-bedroom units that come with entertainment areas,” said Jacqueline Wong, Head of Residential at JLL.

“Going forward, we think this trend is likely to sustain and we will continue to see disparity in the housing market, where small-size leasing stock continues to face downward pressure, while larger units continue to see (an) upside”.

Based on caveats lodged, buyers from the Asia-Pacific region continue to dominate prime market sales, with Chinese, Indonesian and Malaysian buyers purchasing more than 50 percent of the units sold in the prime market in the first quarter.

The largest proportion of sales of prime residential units went to Indonesian buyers, contributing 24 percent of the total units sold. This was followed by Chinese and Malaysian buyers, acquiring 16 percent and 14 percent of prime residential units respectively.

Indeed, Chinese buyers were second only to Singaporeans in terms of the total number of units acquired in the first quarter. Nearly 241 units were sold to Chinese buyers, of which 63 percent were located in the mass market and priced at between S$500,000 and S$1.5 million.

“The surge in Chinese buyers in Singapore coincided with the policy tightening in China,” said Dr. Chua Yang Liang.

“While we do not expect a repeat of what is observed this past quarter, we can expect the number of Chinese buyers to continue at a healthy level as seen in previous quarters, as the fiscal and monetary policy in China remains conducive to overseas investment by the wealthier Chinese.”