Prime property market warming up

Competitive pricing driving up sales; varied purchase schemes give buyers more options

More activity is afoot in the prime residential market after a recent rise in sales amid competitive pricing and various purchase schemes giving buyers more options.

Developer CapitaLand is testing the strength of the high-end market segment with Victoria Park Villas, at the junction of Coronation and Victoria Park Roads, which goes on VIP preview from today.

The 99-year leasehold project consists of 106 semi-detached houses and three bungalows. Floor areas for the former are from 4,155 sq ft while prices are from $4.3 million.

CapitaLand won the Government Land Sales site with a bullish bid of $908 per sq ft (psf) on land in June 2013, or about 17 per cent higher than the next highest bidder.

Market watchers noted that CapitaLand is probably pricing close to cost. In a better market, such houses could sell from about $6 million.

While decent sales have been notched up at luxury apartments, it remains to be seen if buyers can stomach the sums involved in buying landed properties.

An artist's impression of Gramercy Park, a CDL freehold project in Grange Road. Even though it has not been officially launched, it has already sold 30 units at an average of about $2,600 psf.
An artist's impression of Gramercy Park, a CDL freehold project in Grange Road. Even though it has not been officially launched, it has already sold 30 units at an average of about $2,600 psf. PHOTO: COURTESY OF CITY DEVELOPMENTS

A total of 131 luxury apartments worth $5 million and above were sold in the first half of this year, said a CBRE report released yesterday. This is about 76 per cent of the 166 units sold in the whole of last year.

As at June 30, the overall average price of luxury apartments was $2,950 psf, up from $2,700 psf at the end of last year. This was due to more prime properties being sold recently, such as at Ardmore Three, where 34 units were sold at $3,200 psf in the first half of this year.

Another project, OUE Twin Peaks, is launching units in Tower 1 for sale at the end of this month. OUE has just 10 units left to sell in the other tower at the 99-year leasehold project in Leonie Hill, where prices are from about $2,400 psf.

It is introducing a fourth payment scheme, in addition to three schemes it offered previously - the standard payment scheme, deferred payment scheme and one with a longer option-exercise period. The fourth is a mix of the second and third.

Gramercy Park by City Developments Limited (CDL) has gained some traction as well. The freehold project has not been officially launched but has sold 30 units at an average of about $2,600 psf.

  • 131

    Number of luxury apartments worth $5 million and above sold in the first half of this year

    166

    Number of luxury apartments worth $5 million and above sold last year

    $2,950

    Price of luxury apartments per square foot as at June 30

    $2,700

    Price of luxury apartments per square foot at end of last year

MORE FOREIGN INTEREST SEEN

Most buyers of luxury properties are still Singaporeans, although we have been seeing... more Malaysians, Indonesians and Chinese in the last quarter or so.

MR DOMINIC LEE, a PropNex Realty branch district director.

Two-bedroom units with a study and three-bedroom units were especially well-received, a CDL spokesman said. The majority of buyers are Singaporean.

"Most buyers of luxury properties are still Singaporeans, although we have been seeing... more Malaysians, Indonesians and Chinese in the last quarter or so," said Mr Dominic Lee, a PropNex Realty branch district director. These foreign buyers buy for capital preservation and are undeterred by unfavourable foreign exchange rates, he added.

Prime residential property in Singapore offers compelling pricing compared with other global cities, a recent JLL report noted. Prime home prices in New York and London were 10 to 30 per cent higher than Singapore in 2010.

In the last five years, these rose 20 to 25 per cent while those in Singapore fell 20 per cent.

A version of this article appeared in the print edition of The Straits Times on July 22, 2016, with the headline 'Prime property market warming up'. Print Edition | Subscribe