Apartment prices increased by 6% quarter on quarter, villa prices increased by 9% and townhouse prices increased by 7% compared to the second quarter.The overall volume of market transactions increased by 64% during the third quarter compared to the previous quarter.

“The increased availability of finance and a softening of loan-to-value ratios eased the liquidity concerns of purchasers. Supporting this demand is a perception of improved expatriate job security, excluding the real estate sector. In addition, the ability of purchasers to monitor the actual progress of developments has allowed for greater transparency regarding progress,” the Colliers report said.

While units in some developments and areas saw a severe drop in prices this year due to location and quality, others showed more resilience. Well-planned, mature developments in good locations complete with facilities and a good infrastructure will enjoy highest demand.

A leading banker, who wanted to remain unidentified, said a possible initiative from the government which could restore confidence and help galvanise the real estate sector is to reconsider the provision of residence visa facility for buyers of free-hold residential units. “In fact, an impression created by some developers during the beginning of the recent property boom cycle that all free-hold buyers would be granted residential status had been driving the market at a phenomenal pace of growth. However, a few months ago when authorities clarified that buyers of free-hold property were not entitled for residential visa status, the market started to get a jolt as several international investors pulled out of the market.”

Dr Ram Buxani, founder-chairman of Overseas Indians Economic Forum, said those who bought multiple of units to take advantage of lucrative earning opportunities should be accorded “an affordable exist route so that they do not resort to distress sales, delaying further the recovery of property market. The projects which have not taken off or just started must be put on hold and impatient and incapable investors should be allowed a convenient exit.” He said the sudden demand slump in the market and credit squeeze by banks have caught such investors unawares. “Faced with a Catch-22 situation, they are likely to default or resort to distress sales that may aggravate the resulting in longer delays for the market to revive. These individuals need to be addressed differently than bulk corporate and rich investors.”