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$5,000 psf units 'not sign of rise in market'

This story was first published in The Straits Times on June 27, 2013

RECENT residential transactions at the top end of the market may have crept above the $5,000 per sq ft (psf) level but they do not suggest that the moribund luxury market is stirring to life, analysts say.

"This does not reflect that average prices of overall high-end residential properties have generally increased or will be improving," said R'ST Research director Ong Kah Seng. He said luxury-home buyers are still few and far between, and investor interest in high-end property remains weak due to low leasing demand.

"Companies are very cautious in providing generous housing allowances for senior expatriates due to the ongoing overall economic uncertainty. Many senior tenant-expatriates are also more willing to settle for fewer frills or less spacious, more functional units than super-luxury high-end. And there are also fewer new senior expatriates seconded to Singapore on family-relocation packages."

A 2,756 sq ft unit at the freehold Hamilton Scotts was sold at $5,001 psf for a total price of close to $13.8 million last month, Urban Redevelopment Authority (URA) records show.

HSR research head Elaine Chow said the psf price for the 24th-storey unit was "quite an achievement" by the development's new owners, given that a 20th-storey unit of the same size was sold at $3,401 psf on Jan7, before the Government implemented a seventh round of property curbs. "A 47 per cent spike in five months is unusual," she said.

Chinese firm Reignwood Holdings took over all 36 unsold units at the 56-unit project in April this year from KOP Properties.

Freehold TwentyOne Angullia Park performed even better - two units were sold at $5,099 psf and $5,560 psf last month. The caveats for these transactions have not yet been publicly lodged with URA.

The last time sale prices rose above the $5,000 psf level was when a unit at the freehold Skyline @ Orchard Boulevard was sold at $5,011 psf or nearly $18.9 million last September.

Before May's new sales, the highest psf prices transacted each month have mostly remained below $4,000 psf since the start of this year.

Knight Frank research head Alice Tan said prospective buyers of posh homes are still deterred by high transaction and holding costs arising from the additional buyer's stamp duty and an impending rise in property taxes.

She noted that there were around 11,000 uncompleted non-landed city centre homes that remain unsold as at the end of the first quarter this year.

These homes make up a third of the total unsold and uncompleted non-landed homes here.

"The unsold inventory of high-end residential units, coupled with rising market uncertainty pertaining to liquidity and interest rates, could exert downward pressure on sale prices in the months ahead," Ms Tan added.

melissat@sph.com.sg

This story was first published in The Straits Times on June 27, 2013

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