Singapore's private residential market experienced a strong surge in the third quarter, as the volume of transactions increased 20 percent over the second quarter.

According to property consultancy firm Savills, around 11,000 units were sold between July and September, mostly in the mid-tier and mass market sectors.

Projects like the Optima at Tanah Merah, Hundred Trees at West Coast, and The Gale at Flora Road benefited from this buying interest.

However, the high-end sector observed that the government’s implementation of the cooling-off measures and the limited number of launches eased off transaction volumes in the third quarter.

Behind the buoyant sales, prices of private properties increased 15.8 percent in Q3 - the sharpest quarterly rise in 28 years.

Even in the high-end sector, prices recorded two consecutive increases, despite being around 22 percent under the previous peak in the last quarter of 2007.

Savills said that it expects to have slow transaction volumes in the private residential sales market in the next few months, as purchasing activity tends to ease during the year-end holiday season and there will be fewer major launches.

However, island-wide prices of homes are expected to stay firm, with a modest increase from Q3 to Q4.

Meanwhile, office vacancy rates surged 12.5 percent in Q3. The figure was up by 2.5 percentage points from Q2, as 1.25 million sqft of new office space was completed.

According to Savills, net supply now exceeds net demand by around 1.2 million sqft. Companies stayed cost conscious in Q3 despite a more positive outlook for the economy.

Consequently, tenants relocating to seize the chance of transferring to new office buildings that give them a more competitive rental package largely led the leasing activity.

Looking forward, Savills said that the slow pick up of business confidence will prompt more companies to revisit or to expand their space planning needs that will result in an increase in the demand for leasing.
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