Strata houses, also known as strata landed houses, offer residents with the benefit of having a landed property while sharing communal facilities. The units are built as landed homes or cluster housing in an apartment project or a condo. If you are not sure of what a strata landed house is, you may visit One Surin or Jazz Residences, both in District 19.
The popularity of the strata homes has dwindled with the increase in the market of high-profile condos and introduction of total debt servicing ratio in June 2013. As a result, units resold have reduced to 106 in 2015 from 318 in 2012 while the price has decreased with above 10% between 2015 and 2013.
Of late, the strata homes have returned and are being offered by some condos. With their prices having fallen, potential buyers should revisit the segment.
Generally, landed houses had better price performance than non-landed housing. The landed homes URA price index moved from 86.8 in quarter one 2006 to 159 in quarter one 2016, an increase of 83% or a 6.2% annualized gain. The price index for non-landed home moved from 85.7 to 136.6 in the same duration, an increase of 59% and a 4.8% annualized gain.
The gain in prices of the strata homes was at par with that of conventional landed houses, based on an analysis of caveats lodged for resale.
Between 2005 and 2015, strata houses resale prices doubled from $356 to $716 translating to 7.2% annualized gain. The resale prices of freehold rose from $411 to $783, a 6.7% annualized gain. Prices for leasehold properties rose from $320 to $628, an annualized gain of 7%. This shows that the gain for strata houses is close to that of non-landed homes. However, historically landed houses outperform the non-landed.
As from 2011, apartment and condo projects have included landed homes as part of their units. However, landed homes have experienced higher price gains in comparison to condo units.
At Ridgewood, strata houses had a price gain of 158% over 10 years with a 2,852 sq ft house selling at $469 psf in 2005 and a similar unit going for $1,209 psf in 2015. A condo of 1,744 sq ft was sold at $484 in 2005 and $1,225 psf in 2015 recording a price gain of 153%. Ridgewood has 38 landed units and 452 condos with leasehold of 999 years.
Sandalwood had its terraced house price double in nine years after a $3,488 sq ft unit was sold $1,061 in 2013 twice its 2004 purchase price of $530. An apartment of 1,184 sq ft was resold at $1,118 in 2013 after being bought for $662 in 2004 recording a price gain of 79%. Sandalwood has 16 terraced units and 23 apartments on freehold.
The Ford @ Holland terraced homes only gained 5% after selling at $1,218 psf in 2013 slightly above $1,000 psf the unit fetched in 2006.
Projects that have both apartments and strata landed homes are not given the condo status by URA since 2012.
Landed homes are in short supply and are therefore considered to be trophy properties, explaining their appreciation in price. By the end of quarter one 2016, landed homes (terraced, semi-detached and detached homes) were 72, 205 in comparison 258,098 condos and private apartments.
Their scarcity will protect their long-term capital appreciation provided the economic fundamentals of Singapore remain strong. In the next five years, only 1,582 landed homes are scheduled for completion and only 3% in comparison to 57,597 private homes.