Complete Property Market Updates of Singapore

April 27, 2008

Prices of high-end condos starting to fall as sales dwindle

Filed under: General — Propertymarketupdates @ 12:47 am

Downward trend may continue for next few quarters, experts predict

HOME prices are starting to fall, as several high-end properties begin to feel the squeeze of retreating buyers.

Sales of Singapore’s most expensive condominiums – all the rage last year – have dwindled to just a trickle this year.

And with plunging sales, prices have also started to dip, although official figures have yet to reflect this trend.

Early signs of the slide lie in the handful of caveats filed involving many luxury projects in the first quarter. These showed prices fell from the previous quarter, in some cases by up to 20 per cent.

In Districts 9 to 11, Singapore’s creme de la creme of residential locations covering Orchard, Holland and Bukit Timah, average prices have fallen by about 30 per cent since the beginning of the year, according to caveats.

They dropped to an average of $1,564 per sq ft (psf) between January and March from $2,023 psf in the preceding three months.

In luxury island enclave Sentosa Cove, almost all condos posted drops in average psf prices, ranging from 2 per cent for the Marina Collection to 23 per cent for The Azure.

Property experts say this could be because luxury home buyers are now selecting only the most competitively priced properties.

‘Market activity is very slow now, so any transactions that do take place are likely to be from people who have found attractive buys,’ said Mrs Ong Choon Fah, the executive director at property firm DTZ Debenham Tie Leung.

She said high-end properties in the traditional prime districts were more dependent on investor buying, so they could be more affected by the current global credit crunch and weaker sentiment.

‘A lot of people who bought luxury homes are also ’specuvestors’, so they may be happy making just a small profit and selling quickly,’ Mrs Ong explained.

The Government estimated last week that private home prices continued to climb in the first three months of the year, albeit at a slower pace. They rose 4.2 per cent, down from 6.8 per cent in the previous three months.

In the priciest segment, the core central region, the price gain dropped to 4.4 per cent from 7.5 per cent in the previous quarter. This region covers Districts 9 to 11, the Marina Bay area and Sentosa.

Anecdotal evidence from property insiders and caveats lodged, however, showed that prices at many projects fell rather than rose this year. At Scotts Square in Scotts Road, only two units have been sold so far this year – at an average price of $3,700 psf, down from $4,000 psf for 42 units in last year’s fourth quarter.

Similarly, at The Oceanfront @ Sentosa Cove, the most recent deals were in February, where three units were sold at $1,720 to $1,751 psf. Just six months before that, 15 units were sold at an average price of $2,480 psf.

Other high-profile, pricey condos, such as the Marina Bay Residences and The Marq on Paterson Hill, have yet to see a single caveat lodged this year.

But the story is not all bad. The Orchard Residences, which holds the title of Singapore’s most expensive condo, has sold only one unit this year – but at $4,700 psf, higher than most of its other sales.

Other older condos in areas such as Cavenagh or Balmoral may also be trading at higher prices from their previously low base, pushing up the overall prices for the whole district, suggested Mr Ku Swee Yong, director of marketing and business development at Savills Singapore.

But he said the price index for high-end homes may be under pressure in the next two quarters, now that ‘everyone wants a bargain’.

‘You only need developers to start giving discounts or people starting to buy lower-

floor units instead of penthouses. That will push the index down and put pressure on prices.’

Source : Straits Times – 9 Apr 2008

Advertisements

Leave a Comment »

No comments yet.

RSS feed for comments on this post. TrackBack URI

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Create a free website or blog at WordPress.com.

%d bloggers like this: