THE hot property market looks set to go from strength to strength this year. But how exactly will the recovery unfold - and what particular trends will get buyers excited?
On two points, experts are clear. First, they say it is up and up for the already booming sectors such as high-end luxury units.
Second, weaker areas such as mid-tier condominiums will get pulled up finally, as developers, investors and consumers gain confidence in the market rebound.
While market players have a vested interest in being upbeat, the signs are strong that almost every sector of the property market will thrive in 2007.
But which will stand out most in a rising market? Here are four major themes likely to hog the headlines this year.
Orchard Rd homes
MARINA Bay condominiums may have stolen the limelight last year, but the star of the residential market this year looks set to be Orchard Road.
A spate of anticipated launches in Singapore's main shopping belt may result in 3,700 new homes on the market, and push average prices up about 25 per cent this year to hit new highs, experts said.
Chief among the new launches is Orchard Turn, which is expected to set a new benchmark price for 99-year leasehold homes in the area.
Property consultants are predicting average prices of about $2,400 per sq ft (psf) for the 100 or so luxury units.
Some bigger units on the higher floors may even hit up to $3,500 psf, rivalling Singapore's highest-priced condominiums at Marina Bay Residences, said Ms Tay Huey Ying, director of research and consultancy at Colliers International.
This is far above the $1,500 to $1,700 psf average in the area last year, according to Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.
In general, prices of Orchard Road homes are expected to rise 25 per cent or more to about $2,100 psf, as they head towards a record high of $3,500 psf next year, he added.
Mid-tier condos
SEVERAL mid-tier homes launched towards the end of last year saw strong take-ups, a signal that the exuberance in the luxury segment may finally be filtering down to the lower ends of the market.
With high-end prices continuing to soar, some prospective buyers may be priced out of this market and turn their attention to mid-tier projects this year, said Ms Tay.
A strengthening economy, more jobs and rising wages could also help boost mid-tier demand as more buyers enter the home market, said Mr Joseph Tan, residential director at CB Richard Ellis (CBRE).
Mr Ku agreed, saying that '2007 will be the year of the mid-tier and mass markets'.
But while some experts argue that the mass market may be held back by stagnant Housing Board (HDB) resale prices, most agree that the mid-tier segment will rise.
Mr Ku expects mid-tier prices to increase more than 20 per cent this year, with those in Bukit Timah and Katong increasing from their current average prices of below $900 psf to $1,200 psf by early next year.
Other areas that are anticipated to benefit from the rise in the mid-tier market include Marine Parade, Buona Vista, Clementi, Pasir Panjang, West Coast, Holland, Balestier and Thomson, he added.
Reits
REAL estate investment trusts (Reits) came back into focus last year with the listing of a bumper crop of seven new property funds on the Singapore Exchange.
This year, more - and more diverse - property trusts are expected to emerge.
Highlights include the first Reit of state-owned assets by JTC Corp.
Market buzz has also thrown up a new Reit comprising HDB shops and carparks.
In the private sector, cross-border Reits are poised to feature strongly. The first Singapore-listed Indian Reit may emerge, and CapitaLand has confirmed that it may launch an Islamic Reit, with assets in the Middle East and Asia.
Indonesia's Lippo Group has also said that it will list two Reits in Singapore this year, one comprising Jakarta malls and the other, Asian offices.
Tycoon Kwek Leng Beng of City Developments has also raised the possibility of putting his considerable office assets into what would become one of Singapore's biggest Reits.
Office rents
OFFICE rents across the island are likely to hit new highs this year, boosted by a worsening supply crunch and surging demand from expanding firms.
Rents of Grade A offices in Raffles Place, the most premium office space in Singapore, will breach their 1996 highs in the first half of this year, predicts Ms Tay of Colliers.
Knight Frank director Agnes Tay expects such rents to rise 15 to 25 per cent, with occupancy hitting 99 per cent.
Elsewhere, rents will rise 10 to 20 per cent, she said.
Mr Moray Armstrong, executive director of office services at CBRE, also said late last year that the 'steepest rental increase is expected in the next 12 to 18 months as demand drivers remain extremely strong'.
He added that the 'tight availability situation is expected to persist for another three years due to the construction time lag' and will be eased only by a sharp slowdown in demand or greater supply hitting the market in 2009.
Only one major office building, the 145,000 sq ft VisionCrest in Oxley Rise, is scheduled to come onstream this year, said property firm Jones Lang LaSalle.
This is nowhere near the 2.9 million sq ft of office space demanded by occupiers last year, so companies are likely to divert some operations to less prime areas as well as business and science parks, said market watchers.
fiochan@sph.com.sg
