Demand from Singaporean home buyers continues to grow

Romesh NavaratnarajahDecember 6, 2016

Lake Grande 3D model-crop

Lake Grande in Jurong was the most popular project among Singaporeans in Q3, with 441 units sold to local buyers. (Photo: Christopher Chitty)

The residential market is seeing growing demand from local buyers, who accounted for around 76 percent of home sales in Q3 2016, revealed a report from Edmund Tie & Co.

In fact, home purchases by Singaporeans climbed 1.9 percent quarter-on-quarter to 3,403 units, despite traditionally slower demand during the third quarter due to the Ghost Month. Home purchases by buyers with HDB addresses, however, fell from 1,792 units in Q2 to 1,480 units in Q3.

Lake Grande emerged as the most popular project among Singaporeans during the quarter, with 441 units sold to local buyers, while The Trilinq (63 units sold) and The Poiz Residences (51 units sold) came in a distant second and third, respectively.

Foreign buyers, on the other hand, accounted for nearly 23 percent of home purchases, with the number of sales to Singapore permanent residents (SPR) dropping to 784 units in Q3 from 816 units during the previous quarter. Purchases by non-permanent residents (NPR) also fell to 240 units from 302 units previously.

“Mirroring the preferences of Singaporeans, SPR buyers were attracted to Lake Grande at Jurong Lakeside District, registering 59 home acquisitions,” said the report.

“The potential of Jurong Lakeside District becoming the second CBD also attracted NPR buyers, registering 14 purchases in Q3 and highest among the developments.”

NPR buyers were also attracted to developments in prime locations, including Sophia Hills, Gramercy Park and Marina One Residences.

In Q3, homes sales increased by one percent quarter-on-quarter to 4,596 units.

The property consultancy attributed the uptick in transactions to the stronger showing in the resale market, which registered a 15.7 percent quarter-on-quarter increase in sales. Primary home sales dropped 13.2 percent due to slower sales in August.

But despite the increase in transaction volume, home prices remained soft as the Urban Redevelopment Authority’s (URA) private residential property price index fell 1.5 percent quarter-on-quarter in Q3, its 12th consecutive quarter of decline.

Looking ahead, Edmund Tie & Co expects home prices to ease further, as the city-state’s economy continues to face headwinds. The economy grew 0.6 percent year-on-year in Q3, which was lower than anticipated.

“With the economy slowing, the Monetary Authority of Singapore (MAS) cautioned households to consider their housing choices carefully, as retirement adequacy could be compromised should households overstretched their finances,” it said.

Nonetheless, prices of properties close to amenities and transportation facilities are expected to remain resilient.

“The projects in 2017’s pipeline are very attractive, and are expected to garner much interest. We anticipate most projects in 2017 to do well, given their choice locations,” it added.

 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg

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