RESALE prices of landed homes rose in the first quarter while those in the condominium market softened, according to estimates from consultancy DTZ.
Freehold landed homes in suburban areas posted a 1.6 per cent price rise in the three months to March 31 while those in prime districts 9, 10 and 11 rose 1 per cent compared with the last quarter of last year.
As the first quarter has not ended yet, the figures are estimates based on completed transactions.
With less than two weeks to the end of the quarter, DTZ's head of Asia-Pacific research Chua Chor Hoon said the estimates should be close to the final figures.
Resale prices of non-landed homes continued to weaken in the first three months of the year, with those in the prime districts of 9, 10 and 11 faring the worst.
Luxury condo prices declined 0.8 per cent while freehold condominium values slipped 0.7 per cent from the previous quarter.
This was due in part to dwindling demand triggered by the additional buyer's stamp duty implemented in December, DTZ said.
Competition from uncompleted projects was another factor. An average of 2,200 units - excluding executive condominiums - were launched in January and last month. Last year, an average of 1,510 units were launched each month.
Despite the new stamp duty, sales of non-landed homes in the primary market jumped in the first quarter.
Primary sales, excluding executive condominiums, averaged 2,143 units per month in the first two months of the year, up from the monthly average of 1,364 units last year.
'The strong showing in the primary market was, however, not widespread, and was driven mainly by a few popular projects such as The Hillier, Watertown, Parc Rosewood and Guillemard Edge, which contributed to more than half of the sold units in January and February,' DTZ noted.
'These projects enjoy attractive locations near MRT stations and offer small affordable units which reflect the trend in the market of investors eager to park some of their money in property to earn better returns.'
In contrast, sales of non-landed homes on the secondary market, many of which are not near MRT stations and of bigger unit sizes, hit a low of about 470 units per month over January and February.
That was markedly lower than the monthly average of about 1,400 units recorded last year.
'We expect a higher proportion of local buyers to dominate the market as foreigners take time to adjust to the new 10 per cent buyer's stamp duty they now have to pay,' said Ms Chua.
'This will have a greater dampening effect on sales volume and prices in the prime areas.'
But the popularity of uncompleted suburban developments is expected to remain healthy, barring a recession, Ms Chua added.
'If demand continues to remain strong at above 1,500 units a month, we do not preclude the possibility of further government cooling measures.'