New measures have already dampened property market

With 3,092 new homes sold from October to November, the residential market started Q4 2011 "on a strong note", with new home sales for the first 11 months hitting 15,393 units, before the new set of cooling measures were introduced in December, according to CBRE in its latest quarterly report.

Before the additional buyer's stamp duty (ABSD), strong sales activity was seen in Este Villa, Bedok Residences and The Palette.

The executive condominium (EC) market also performed well, with five projects adding a record 2,535 ECs to the market. With more choices and a 20 to 25 percent price gap between mass-market condominiums and ECs in the same location, buyers opted for over 2,100 EC units.

However, the ABSD has affected the property market. "The introduction of ABSD in December 2011 has dampened buying sentiments. Nevertheless, the total volume of new homes sold (excluding ECs) in 2011 may come close to 16,000 units, short of the record 16,292 units sold in 2010," said CBRE.

Moving forward to this year, CBRE expects a 15 percent decline in demand for new homes and a drop in prices of luxury/prime (10 to 15 percent) and mass-market homes (five to 10 percent). Landed home prices may moderate by less than five percent, with limited supply and foreigners prohibited from purchasing them.

In terms of investments, real estate investment yielded S$29.5 billion in 2011. With more government land sites awarded and K-Reit's 87.5 percent acquisition of Ocean Financial Centre from Keppel Land, investment sales rose 59 percent to S$7.6 billion in Q4.

"Total investment sales in 2012 are expected between S$20 million and S$25 million reflecting the more cautious outlook. This is based on weaker rental outlook and tighter liquidity conditions expected ahead," it noted. Related Stories:Mt Vernon Road residential site draws few bids

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