Luxury home sales continue to sputter in third quarter

D'Leedon (above) is among the top-selling luxury condominium projects in the primary market so far this year. The others include Leedon Residence and Palms @ Sixth Avenue.
D'Leedon (above) is among the top-selling luxury condominium projects in the primary market so far this year. The others include Leedon Residence and Palms @ Sixth Avenue.ST FILE PHOTO

Weak sales of upscale apartments blamed on ABSD and widening buyer-seller price gap

Luxury home sales seem to be still stuck in the doldrums.

Just 112 luxury apartments have been sold so far in the third quarter, well down on 162 units for the same period last year and 188 in 2013, DTZ Research analysis shows.

It defined luxury apartments as homes in Districts 9 to 11 with floor area of at least 2,000 sq ft.

Upscale apartments have also been accounting for an ever smaller proportion of overall secondary non-landed sales, DTZ found.

They made up 10 per cent (73 units) of secondary non-landed sales in the quarter, down from 12 per cent (147 units) in the second quarter and 12 per cent (97 units) in the third quarter last year. The proportion was higher, at 14 per cent (118 units), in 2013's third quarter.

While the number of foreign purchases of luxury apartments have declined on the whole, purchases by Malaysian and Indian buyers are the most resilient.

"Sales for the segment are slower primarily because of the Additional Buyer's Stamp Duty (ABSD), as the amount is higher given the quantum," said Dr Lee Nai Jia, regional head of research at DTZ.

"Another reason is the price gap between sellers and buyers. Sellers (of luxury homes) have better holding power compared with those of mass-market condominiums. At the same time, buyers have been looking for steep discounts."

However, sales of landed houses in Districts 9 to 11 are holding up, with 30 houses worth a total of $266.3 million sold in the quarter to date, comparable with the 32 houses worth $274.9 million over the same period a year back and 23 houses worth $244 million in 2013.

In the primary market, top-selling projects this year so far include Leedon Residence, D'Leedon and Palms @ Sixth Avenue.

In the secondary sales market, which can include developer's sales of old stock, top sellers were Goodwood Residence, Urban Resort Condominium and St Regis Residences.

While the number of foreign purchases of luxury apartments have declined on the whole, purchases by Malaysian and Indian buyers are the most resilient, said Dr Lee.

Purchases by Chinese buyers fell 37 per cent from two years ago to 34 units in the second quarter; those by Malaysians fell 18 per cent to 32.

But a Hong Kong citizen picked up at $21 million townhouse at Bishopsgate Residences late last month. Fellow citizens have expressed interest in a penthouse at over $13 million and a four-bedroom unit at about $9 million in the project, which is marketed by Singapore Christie's Homes.

"They find Singapore properties cheaper and better value than those in Hong Kong," said Singapore Christie's Homes managing director Samuel Eyo.

A version of this article appeared in the print edition of The Straits Times on September 29, 2015, with the headline 'Luxury home sales continue to sputter in third quarter'. Print Edition | Subscribe