As of the second quarter of 2021, 19.3 per cent of private housing stock and 5.1 per cent of overall housing stock consisted of 73,263 finished landed dwellings. The rarity and longstanding allure of single-family houses makes them an attractive investment option in the residential property sector.
Like the wider housing market, the landed market has been impacted by the regulations implemented in July 2018 to combat the overheating of the market. Higher pricing expectations held down sales. The landed sector deteriorated in 2019 because to the trade dispute between the United States and China.
People spent more time at home for work, education, and family leisure because of the H1N1 pandemic, which resulted in a bigger living area being a draw for purchasers. This, in addition to the 32% increase in sales volume to 1,805 in 2020, led to the 38% rise in revenue to $1,304 in 2020, from $966 in 2019.
With this year’s momentum behind it, 1,779 houses were sold throughout the first seven months of this year. The overall number of detached and semi-detached homes sold in January-July 2021 will already surpass the number of detached and semi-detached houses sold in all of 2020. That is, if the current trend continues, we may expect to see more than 2,000 landed houses sold by the end of 2017, which is the most since 2012, meaning that we may be seeing a rebirth for the sector.
The three kinds of landed properties have all shown a general rise from 2018 to July 2021, according to their prices per square foot (psf) of land area. Semi-detached homes appreciated by 10.5% to hit S$1,281 psf. Terrace home prices increased 9.7%, rising to S$1,448 psf, while detached house prices increased 9.6%, rising to S$1,427 psf.
In terms of location, the landed sector shows distinct variations per district. Sale volumes in districts 19, 15, 28, 16, 10, and 20 from 2018 to July 2021 exhibited the greatest levels of transaction data. Homes were purchased in these six areas representing 61% of the total number of properties purchased across the whole island. It should be expected that the districts with the greatest concentration of landed housing are also the districts with the highest concentration of creative housing.
The strong sales have aided a good compound annual growth rate (CAGR) for pricing in the top six districts from 2018 to July 2021. CAGR (compound annual growth rate) of 3.1% was seen in District 20.
the price of goods in District 16 increased by 1% due to it being located the farthest away from the city
Because these areas include prominent primary schools, malls, and leisure and lifestyle choices, they are magnets for new residents. Other than Districts 15 and 28, all four MRT lines service the other districts, allowing for increased connectivity.
There is a continuous supply of households upgrading to landed properties in the same neighborhood since so many districts are either in or bordering HDB estates. Collective sales produced additional demands for these vendors from those who sold their units in the previous year.
From January 2018 to July 2021, Districts 8, 12, 9, 4, 25, and 18 each had less than 100 landed homes sales. As a result, just 2,623 landed houses in total were available for those who lived in these six districts.
District 8 was a unique market, with two terrace homes selling for S$2,176 psf in 2018 and two for S$1,158 psf in January-July 2021.
Due to the restricted supply of landed houses for sale, the district’s high growth rate of 4.5% may be ascribed to it. Although sales of high-end villas in Sentosa Cove generated just 2.2% CAGR growth in District 4, their sale was crucial in boosting the overall growth of the district to 2.2% each year.
Despite the distance to the city center, Districts 25 and 18 were unattractive to purchasers since their prices were below S$1,000 psf.
Almost half of the 40 sales in District 9 were at the conservation homes at Emerald Hill and Cairnhill. Investors who purchased these assets paid a premium to support the impressive CAGR of 8.9 percent.
Potential Landed Zone
On August 28, the Springleaf, Lentor, Mayflower, Bright Hill, Upper Thomson, and Caldecott stations opened on the second stage of the Thomson-East Coast Line (TEL). Also, two additional MRT lines will be linked to TEL. This adds further connection to landed properties in Sembawang, Lentor, Ang Mo Kio, and Thomson, making them more attractive to potential homebuyers.
The following three phases of TEL, covering 23 stations from Mount Pleasant to Sungei Bedok, will open between 2022 and 2025, traveling through Downtown and Districts 9, 10, 15, and 16. The prospects will be interested in the properties that are located in these areas.
At the same time, developers have been keeping an eye on community-based marketplaces. Because to en-bloc sales of smaller residential projects, such as Lew Mansion, Ji Liang Gardens, Surrey Point, and Woo Mon Chew Court, there have been a few year-end developments to unblock. Only about 50 homes were impacted.
A substantial number of houses will be freed up if these bigger sites in Districts 10, 15, 19, and 20 are sold on collective sales. Districts in these neighborhoods may become into magnets for land sales.
There may be a rise in landed house values if new developments are underway such as Brighthill Residences. To make way for these new construction projects, Belgravia Ace, a residential development with 104 semi-detached and three terrace homes, and Pollen Collection, which consists of four semi-detached and 128 terrace houses, will be built. Both projects are situated in District 28, and they may be implemented by the end of 2021.
In contrast to previous sales in Luxus Hills, where terrace homes in new developments were sold for between $3.2 million and $3.5 million, semi-detached houses in the area are expected to sell for between $4.2 million and $4.5 million.
Additionally, the initiative to create new homes in the Caldecott Good Class Bungalow Area of Mediacorp’s old Broadcast Centre will also establish pricing for new homes in that area.
Families with young children and more money will tend to go for bigger houses, while families with small children and less money are more likely to want to upgrade from flats to landed homes.
These properties will retain their allure among those who can afford them as the future supply of landed houses remains restricted.