PRICES are dropping at more luxury projects as developers struggle to move unsold stock.
At the uncompleted Hallmark Residences in Bukit Timah, units are being advertised at a discount of up to around $300,000, according to a marketing e-mail obtained by The Straits Times.
Consultants said the high-end segment has been weighed down by limited demand and ample unsold stock, adding that some developers may face extra pressure as they approach compulsory deadlines to sell off all their units.
The e-mail said prices at the 75-unit freehold project by MCL Land used to start above $2,200 psf but that has been cut to more than $1,800 psf.
The starting total price for two-bedroom units of 969 to 990 sq ft used to be above $2 million but that has sunk to over $1.8 million, it said.
A 969 sq ft unit at the project was sold at $2,302 psf in early June last year or $2.2 million, according to caveats lodged with the Urban Redevelopment Authority (URA).
For three-bedders of 1,432 to 1,574 sq ft, the price tumbled from more than $3 million to above $2.7 million, and for four-bedders of 1,851 to 1,862 sq ft, it fell from over $3.7 million to over $3.4 million.
Mr Nigel Cheng, a real estate agent who is listed as the project's developer sales marketing director in the e-mail, declined to comment yesterday.
MCL Land's parent company, Hongkong Land, told the Singapore Exchange earlier this week "a full market launch is planned" for Hallmark Residences, at Ewe Boon Road in prime District 10, for the first half of this year.
"To date, some 41 per cent of units have been pre-sold," it added in a statement. "Sales are expected to remain slow as the premium sector of the market has been the most affected by government cooling measures."
Hallmark Residences had moved five units out of 20 launched by the end of January this year, according to the latest available URA figures.
Consultants said prices in the luxury segment could slide further this year, due to low demand and a high supply of unsold units.
Savills Singapore research head Alan Cheong estimated that there were 10,752 private homes under construction in Districts 9 and 10, of which 4,717, or nearly half, were unsold. He added that there were already "hefty discounts" for high-end projects but these may not be captured in official data and developers have no incentive to publicise them.
Caveats may not have been lodged for those discounted transactions "to mask the true price", he said. Real estate lawyer Lee
Liat Yeang said buyers who do not need financing for their unit purchases are not required by banks to lodge any caveat.
Thus far, several upmarket projects have already seen their prices plunge by as much as half from their 2007 highs.
At the 999-year-leasehold St Regis Residences at Tanglin Road in District 10, for instance, the average price for the past six months was $2,349 psf across three transactions recorded at the 173-unit project. This was a steep 49.5 per cent below the historical high of $4,653 psf in May 2007, according to data from Squarefoot Research.
The freehold Hilltops condo at Cairnhill Circle in District 9 posted an average price of $3,215 psf over the past six months, which was 33.2 per cent lower than the $4,812 psf historical high it notched in October 2007.
Prices of non-landed private homes in the city centre fell 1.9 per cent last year from the preceding year, the URA said in January.
OrangeTee research head Christine Li expects high-end private home prices to soften by up to 5 per cent this year.
She added that policy risks, particularly Qualifying Certificate (QC) rules, were turning up the heat on some high-end developers to clear their unsold stock.
The QC rules give developers up to five years to finish building a project and two more years to sell all the units. They are not allowed to rent out unsold units.
Developers whose shareholders and directors are not all Singaporeans have to get a QC to buy residential property for development. This is imposed to control foreign ownership of land here.
This story was first published in The Straits Times on March 7, 2014
To subscribe to The Straits Times, please go to http://www.sphsubscription.com.sg/eshop/