Singapore’s land market booms due to low supply

A professor at National University of Singapore NUS attributed the surge to two factors, the low supply of luxury homes and a strong demand from high net worth individuals.

As land is scarce, Singapore has a very limited supply of such homes, said Professor Qian Wenlan, the director of NUS' Institute of Real Estate and Urban Studies.

In the fourth quarter of 2012, the number of landed properties under construction fell significantly, according to data from the Urban Redevelopment Authority URA.

As of September, Singapore has about 73,000 landed homes less than 19 per cent of total private housing stock.

The amount of landed houses furnished for rent to the market is inelastic. Whether the rent increase depends on the demand of high-end tenants in the market, he said.

The rise of family offices in the past two years is also pushing up demand in the high-end rental market, said Professor Sing Tien Foo, provost s chair professor at NUS' Department of Real Estate.

They are not eligible to buy landed houses, but they can afford to pay high rents, he said. Besides family offices, they could include other investors and senior management of foreign MNCs relocating to Singapore.