‘Old money’ props rise in luxury home sales

‘Old money’ props rise in luxury home sales

Prices hold firm surprisingly; investment climate may have stabilised, analysts say

Strong take-up: At UOL’s 100-unit Nassim Park Residences, 39 of 70 units launched were sold in May at a median price of $2,929 per square foot, URA data show

 

 

 

(SINGAPORE) Developer sales of new homes jumped to 441 units in May from 284 units in April, with some property consultants already calling it a ‘sharp rebound’.

 

While May sales were still relatively low compared to 2007 levels, several launches in prime and city-fringe locations did well.

 

According to Urban Redevelopment Authority (URA) data, at UOL’s 100-unit Nassim Park Residences, 39 of 70 units launched were sold at a median price of $2,929 per square foot (psf). Sources also told BT that most of these units were sold to Singapore’s ‘old money’.

 

Savills Singapore director (marketing and business development) Ku Swee Yong said: ‘Based on what we have seen in the past few months, high net worth individuals (HNWIs) have not been affected by the slowdown in the global economy.’

 

While these buyers may be more ‘picky’ now, ‘they don’t want to wait for prices to fall just to save 5 per cent’, he said. And with banks generally offering low interest rate returns, these HNWIs are looking to ‘park’ their money in real estate instead.

 

A check with UOL revealed that since last week, Nassim Park Residences has been marketed overseas and more than 50 units have now been sold. UOL Group’s general manager of marketing, Dolly Lian said that as things stand, more than 30 per cent of the buyers are foreigners and the average selling price is $3,300 psf. This is higher than $3,000-$3,200 psf average selling price that some market watchers expected.

 

It is understood that most of the foreign buyers are from Indonesia.

 

Another popular development in May was Macly Group’s 102-unit Vutton, with 72 units sold at a median price of $1,225 psf. A market watcher said this is in the same price range as UOL’s Pavilion 11, also off Moulmein Road, which was sold in 2007.

 

Also selling well in May was Ascend Land’s 106-unit The Verve, off Balestier Road. During the month, 42 units were transacted at a median price of $985 psf. According to URA data, 84 units have been sold so far. In April, eight units were sold at a median price of $1,055, while in March the median price was $1,187 psf.

 

Collier’s International’s director for research and advisory Tay Huey Ying said that while the rebound in sales activity could be ‘just a monthly fluctuation, it may also be a sign that most genuine buyers have come to accept that the current price levels have reached a fair level’.

 

Ms Tay noted that the number of new launches increased 74 per cent in May from April. ‘This encouraging response could be just what is needed to trigger more of such launches in the coming months,’ she said.

 

She added, however, that developers will remain cautious with regard to pricing, ‘as buyers in today’s market tend to be price-sensitive’.

 

CB Richard Ellis executive director (residential) Joseph Tan said: ‘Based on the transactions in May, contrary to market expectations, there was no downward adjustment of prices.’

 

Luxury prices in particular ‘seemed to hold firm’ as projects like Boulevard Vue, Scotts Square and Nassim Park Residences maintained $3,000-psf levels, he said. And in the eastern and western parts of Singapore, prices held at $800-$900 psf at projects including Breeze by the East, Blu Coral, The Ambrosia, The Lakeshore and Crystal Heights.

 

Still, not everyone was as sanguine about the state of the property market.

 

Knight Frank director (research and consultancy) Nicholas Mak said that while total new sales in the Core Central Region (CCR), Rest of Central Region (RCR) and Outside Central Region (OCR) rose 60.9 per cent month on month, the OCR saw a 14.6 per cent drop in sales volume month on month.

 

According to Mr Mak: ‘Essentially, the slight rise in sales volume can be attributed to some stability in investment sentiment. However, it should be noted that this escalation is still 32 per cent below the 12-month average figure.’

 

Looking at take-up rates (new sales versus new launches) in the three regions, Jones Lang LaSalle local director and head of research (South-east Asia) Chua Yang Liang said these were 87 per cent for CCR, 84 per cent for RCR and 146 per cent for OCR.

 

He said the strong take-up rates in CCR and RCR were a result of ‘latent demand spurred on by softening prices’, while the take-up rate in OCR was ‘the result of low supply of new launches over what appears to be a minimum demand threshold – an average of 113 units over the past six months – in the region’.

 

Source: Business Times

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Nassim Park Residences: Wee family goes condo-shopping

Nassim Park Residences: Wee family goes condo-shopping

 

Its members pick up three units in Nassim Park Residences for $40m

 

MEMBERS of the Wee family have bought three units at Nassim Park Residences near Botanic Gardens for a total of nearly $40 million, a filing by UOL Group to Singapore Exchange (SGX) on Wednesday shows.

 

Wee Ee Cheong, CEO of United Overseas Bank and son of UOL chairman and controlling shareholder Wee Cho Yaw, picked up a penthouse for $18.33 million or $2,670 per square foot (psf).

 

Two of his siblings bought a sky unit each in the five-storey freehold condo at about $10.6 million each. Wee Ee Chao, who sits on the UOL board, bought a unit with his wife Jennifer for $3,308 psf, while his sister Wei Chi snapped up a unit for herself for $3,293 psf.

 

The SGX filing also showed that UOL director Alan Choe’s son Jonathan, through his company Montgomery Hills, bought a ground-floor unit, that comes with its own pool, for nearly $11.5 million or $2,513 psf.

 

Buyers of the four units received a special 2 per cent discount. More than 40 units have been sold in the development, which has a total 100 units, since its preview began the week of Vesak Day.

 

The average price achieved is said to be somewhere in the $3,000-$3,200 psf band, although analysts expect the developer to raise prices slightly when the project is officially launched next week. The project is being marketed by CB Richard Ellis and Savills.

 

The units in the development are priced at $10 million and above, with each having at least four bedrooms.

 

Nassim Park Residences has drawn a good mix of local and foreign buyers, and market watchers attribute its encouraging take-up to its ‘reasonable pricing’.

 

‘Had this project been launched a year ago, it could have been priced in the mid to high-$3,000 psf range, on average,’ a market watcher said.

 

UOL is developing Nassim Park Residences jointly with Kheng Leong group (a privately owned vehicle of the Wee family) and Japan’s Orix Corporation, on the former Nassim Park condo site that UOL bought in August 2006 for $380 million.

 

Its land cost worked out to about $1,131 psf of potential gross floor area inclusive of an estimated development charge of $8 million at the time. The breakeven cost then for a new development on the site was estimated at $1,600-1,700 psf.

 

UOL has also sold over 40 units of its 88-unit Breeze by the East condo along Upper East Coast Road near The Bayshore since it began selling the project around mid-April.

 

The five-storey freehold project was initially priced at about $950 psf on average, but this has since been raised to $980 psf, BT understands.

 

Even so, the pricing is considered attractive compared with the $1,600-$1,700 psf average price that Tiong Aik picked for its 20-storey freehold Parc Seabreeze in the Marine Parade/Joo Chiat area in early May.

 

Tiong Aik has since withdrawn the project from the market.

 

Source : Business Times