Landed Home Sales Up By More Than 50% In Q3 2020

In total, the number of landed properties transacted in the first nine months of 2020 was 1,142, a slight increase from the 1,118 transactions registered over the same period last year.

The number of landed homes transacted in the third quarter of 2020 rose to 544 units, up by more than 50% from 212 units in the previous quarter, reported The Business Times (BT) citing OrangeTee & Tie.

This is the strongest quarter for landed homes since Q2 2018 when 755 landed housing units were transacted.

Landed-homes-in-Singapore

The hike in landed sales resulted to a 3.8% quarter-to-quarter increase in the URA landed residential price index.

Wong Siew Ying, Head of Research and Content at PropNex, said the increase in demand was primarily driven by investors looking to preserve their wealth and hedge against inflation, as countries implemented quantitative easing measures following the pandemic.

“Singapore’s reputation as a safe haven for investment and the positive long-term outlook for its property market also gave investors the confidence to park their funds here,” she said as quoted by BT.

In total, the number of landed properties transacted in the first nine months of 2020 was 1,142, a slight increase from the 1,118 transactions registered over the same period last year. Total transaction value rose faster to $4.9 billion, or 11% higher from last year’s $4.4 billion, said the BT report.

The sellers were not offloading their property out of distress.

“The sellers of these bungalows, some are from old money – they don’t need the house or money, or their children say they don’t need the house, and have no time to re-build nor the interest to do so,” said, OrangeTee & Tie Associate Executive Director Jeffrey Sim, who specialises in bungalows.

He also noted that there were a lot of buyers with cash in hand before the start of the pandemic, but were holding out due to Additional Buyer’s Stamp Duty (ABSD) and in hopes that price would adjust.

The government levies a 12% ABSD on buyers for their second property.

Knight Frank Singapore Head of Research Leonard Tay also attributed the jump in landed property transactions to “aspirations for a landed property and the status that comes with owning and living in one”. Another factor is Singaporean’s desire to be near brand-name schools.

The latest transactions also showed buyers’ bias for freehold properties.

In January to September 2020, the median per sq ft (psf) price for 99-year leasehold land fell 9.5% to $886 psf from $979 psf in 2019. Freehold and 999-year leasehold sites, on the other hand, saw prices increase 4.5% to $1,408 this year from 2019’s $1,348, said ERA Realty Research Head Nicholas Mak.

The most popular houses sold in Q3 2020 were those with a land size of between 2,000 sq ft and 4,000 sq ft (265 units), followed by houses on less than 2,000 sq ft land (125 units). Houses on 4,000 sq ft to 8,000 sq ft land saw 100 units sold, those on 8,000 sq ft to 15,000 sq ft sites saw 12 units sold, while bungalows on more than 15,000 sq ft of land sold 10 units.

There were 287 transactions for homes priced between $2 million and $4 million, 161 transactions for those priced over $4 million. There were also 64 transactions for homes priced below $2 million.

Suggested read: Are Singaporeans Superstitious About Buying And Moving House During the Hungry Ghost Festival?

Buyers preferred “pure” landed over strata-landed units.

Of the 544 landed housing transactions in Q3 2020, 468 were landed units while the other 76 were strata-landed units, said OrangeTee & Tie Head of Research & Consultancy Christine Sun .

The 212 landed deals in Q2 2020 comprised 176 landed units and 36 strata-landed units.

Strata-landed housing include condominium developments that feature some landed or terrace units, or cluster homes.

Sim said that many landed owners do not purchase cluster homes since they are “like a condo”.

Source: PropertyGuru 13th October 2020

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