Apartments above $10m still shine in dull market

Apartments above $10m still shine in dull market

In the landed sector, demand for GCBs remains strong, says CBRE

 

(SINGAPORE) The high-end residential sector has been largely subdued in 2008, but at least 50 luxury apartments costing above $10 million each have been sold so far this year. And the tally for the full year, according to property consultant CB Richard Ellis (CBRE), is expected to come in at about 70 to 100 units.

 

This will be lower than the 139 such units sold for the whole of 2007, but still significantly higher than the 2006 full-year figure of 23 units, CBRE’s research shows.

 

Putting things in perspective, CBRE Singapore’s managing director Pauline Goh says: ‘One point to note is that luxury home prices in 2006 were lower than in 2007. Hence, fewer units would have touched the $10 million mark back in 2006. There was also a smaller supply of upscale developments with big units back then compared with 2007 and H1 2008.’

 

The 50-odd luxury apartments costing above $10 million each sold so far this year are the tally at June 17 and include not just units sold at Nassim Park Residences, which was previewed in May, but also a unit each transacted at Cliveden at Grange, The Tomlinson, The Grange and The Orange Grove condos.

 

BT understands that the highest-priced transaction so far this year is a $19.7 million ground-floor unit sold at Nassim Park Residences.

 

In the landed sector, a total of 23 Good Class Bungalows (GCBs) have changed hands so far this year for a total of $380 million.

 

‘We’re quite confident that at least 50 to 60 GCBs will be sold for the whole of 2008. Demand will continue to be strong from Singaporeans as well as PRs, but deals are limited by availability of GCB stock,’ Ms Goh predicts.

 

Last year, a total of 87 GCB deals totalling $1.15 billion were sealed, against the record 119 transactions worth $1.23 billion in 2006.

 

As for the outlook for luxury apartment sales, Ms Goh says: ‘Singapore has a lot going for it; the government has put in so much effort to build Singapore into a global city. We’ll have the integrated resorts, special events like Youth Olympic Games and F1 night race. Singapore is on the radar screens of a lot of international investors. However, the flow of bad news from the US has to stabilise before confidence returns.

 

‘On the other hand, as Nassim Park Residences shows, if the product is right, there can be very, very strong demand. The project is in a very niche location; arguably the best luxury location in Singapore.’

 

Market watchers say the volume of transactions for apartments costing more than $10 million for the rest of 2008 will depend partly on when developers release new prime-district condos and their strategy on the mix of unit sizes.

 

Developers have tended to veer towards bigger units in the past couple of years but some analysts say some developers are now considering changing tack for upcoming projects. These developers are wondering whether it will make more sense now to have a higher proportion of smaller units – given weaker sentiment.

 

‘The idea is to make the absolute price quantums smaller, say $3-5 million per apartment, which will mean a bigger pool of buyers, compared with having a lot of biggish units in a project costing, say, above $10 million,’ an analyst says.

 

Source: Business Times

Advertisements

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