By Lip Kwok Wai and Alice Chia | POSTED: 21 Mar 2014 19:24 | CNA

SINGAPORE: Transaction volume of private landed properties fell last year to its lowest since 1995.

A total of 867 landed properties changed hands in the first half of last year — a reduction of about 40 per cent, compared to the same period the year before.

In the second half of 2013, the number of transactions was 492, which is a decrease of close to 70 per cent, compared to the same period in 2012.

And compared to the year before, the total number of transactions in 2013 has more than halved.

While the sector typically does not see high transaction volumes, some analysts say the decline could be driven by recent property cooling measures and limited supply in the market.

Chris Koh, director of Chris International, said: “We also had (property cooling measures) in place — seven rounds of measures and then followed by the Total Debt Servicing Ratio last year.

“Landed properties are more expensive — in terms of quantum, prices, if I can’t get financing for it, I will have difficulty buying the landed properties.”

The report also pointed out the limited supply of such units — there are about 70,000 units available.

Majority of owners have bought such properties to live in, and not for investment purposes.

“You have a second group of buyers who are really the richer people, the high net worth people who own landed properties. They don’t buy it for a flip to make money quickly, or they buy it for rental returns.

“We all know that landed properties don’t give you good rental returns. They buy it to hold,” said Mr Koh.

In the past five years, the percentage of units rented has remained around seven per cent.

There are also measures in place to restrict foreign ownership.

Generally, foreigners are not allowed to buy landed properties. However, there are exceptions, such as units in Sentosa Cove.

Supply is not expected to increase. The Government Land Sales Confirmed List for the first half of this year is also not expected to yield any sites for landed units.

– CNA/nd