DESPITE sometimes being overshadowed by its condo cousins, landed developments are still hot property in land-scarce Singapore.

Industry pundits believe that landed properties represent attractive investment options for those seeking to cash in on the booming property market.

Latest data has shown that prices of landed homes have risen in line with the rest of the market, growing an impressive 10.1 per cent in the first half of this year compared with a marginal 0.6 per cent rise three years ago.

This compares to an overall increase of 13.5 per cent in private home prices in the first six months of the year.

According to numbers from the Urban Redevelopment Authority (URA), detached houses have seen the most improvement in prices out of all the different landed property types, having grown 12.3 per cent in the first half, up from 8.1 per cent last year.

These numbers were boosted due to the inclusion of good-class bungalows, which saw prices surge 25 per cent in the first half, on the back of rising demand for high-end homes.

Semi-detached and terrace houses saw a 7.6 and 9.3 per cent rise in prices respectively in the first six months of this year.

Savills Residential's executive director David Neubronner is bullish about the prospects for the landed property segment in the next few years.

Prices will continue to climb in the years ahead despite the rapid price appreciation we have seen in the past six months.

"The reasons for the bullishness are strong economic fundamentals and the creation of wealth among Singaporeans, supply crunch and excellent value vis-a-vis rising condominium prices," he said.

The number of landed units coming on stream in the next five years remains a small percentage of all new supply, making it fairly likely that landed residential homes will remain a scarce commodity.

Landed housing is also an attractive investment as they can be rented out to foreigners, who are flowing into Singapore but cannot buy a landed home easily due to curbs on foreign ownership.  

URA's rental indexes for all landed property types improved significantly in the first half of this year with terrace houses leading the way with a 17.3 per cent increase, followed by detached houses at 13 per cent and semi-detached houses with 11.4 per cent.

PropNex Grandeur Homes' head Douglas Wong pointed to the cluster housing sector as one of the more exciting segments in the landed properties market.

"Hillcrest Villas by MCL was the source of some of the most recent excitement in terms of landed cluster housing.

"This 99-year leasehold property, with 163 units, commanded an average price of between $850 per sq ft (psf) and $900 psf during the launch two months ago and was sold out in two or three weeks, which is very impressive for the type of property."

He added that cluster housing was growing increasingly popular as they offered buyers the feel of a landed unit with the benefit of condominium facilities.

Mr Neubronner of Savills agreed and said that recent cluster housing launches such as the Dunsfold 18 at Lorong Chuan and 8 @ Stratton were likely to ride the wave of increasing popularity.

Cluster housing first made its appearance on the Singapore market in 1993 and have taken off in the recent property boom with their offering of the best of both landed and condo properties.

Looking ahead, Mr Wong expected landed properties to continue to perform strongly in line with the booming economy.

"Given the strong economic growth of 9.4 per cent and the launch of the two integrated resorts expected in the next three years, landed property prices should continue to move northwards.

"Landed property prices are relatively much lower compared to prices of apartments and in the recent market upswing, landed property has not gained as much steam as other property types.

"As such, there is still more room for upward movement."

Knight Frank's director of research and consultancy Nicholas Mak agreed that landed prices should move upwards in the near term.

"However, prices have already risen a lot, and if economic growth should ease off, it's very likely that this will filter very quickly down to property.

"Something like the recent sub-prime issue could shake investors' confidence very easily," he said.

The rapid increase in property prices over the past few months also meant that margins had been getting thinner, said Mr Mak.

"There has been a lot of flipping of properties already, and it's getting harder and harder to do so.

"There will still be optimists out there, and prices are still likely to move upwards, but people have to be prepared to accept thinner profits in the future."

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