High-end market hots up

SALES of private residential properties surged to their highest level in nearly two years in May.

According to the latest data by the Urban Redevelopment Authority released yesterday, overall home sales totalled 1,668 units last month, the highest monthly figure since the all-time record of 1,723 units was set in August 2007.

Purchases of private homes in the prime districts, which include Holland Road, River Valley and Newton, nearly doubled in May with 617 units sold, compared with 322 in April.

Market watchers said the spike in transaction volumes was due to the recent stock market rally, coupled with optimistic consumer confidence and liquidity.

Said Mr Donald Han, managing director of Cushman and Wakefield: “Back in late March and April, the regional stock markets went up by about one-third. This fuelled a lot of the liquidity that is coming back into the (property) market.”

CBRE Research’s executive director, Mr Li Hiaw Ho, said there was a significant amount of interest in high-end properties last month. “Five units of The Orange Grove were sold at the median price of $2,320 per square foot (psf), while one unit each of Boulevard Vue and St Regis Residences was sold at $2,602 psf and $2,200 psf respectively,” said Mr Li.

Mrs Ong Choon Fah, head of consulting at DTZ Debenham Tie Leung, said the May figures suggest that the bullish sentiment in the mass market projects has started to filter up to the luxury segment. “The momentum has certainly picked up. A few projects have seen very brisk sales,” she said.

According to URA data, the most popular developments were Martin Place Residences, The Wharf Residence, The Arte and The Mezzo. These four projects, located in the prime districts of 9, 10 and 11, as well as the city fringe areas, made up more than 30 per cent of the sales. The median prices of units there ranged from $903 to $1,423 psf.

Mr Desmond Sim, associate director of Research at Jones Lang LaSalle, said discounts given by the property developers and strong latent demand helped to boost sales.

Looking ahead, DTZ’s Mrs Ong said prices in the prime districts are likely to go up when more investors comes back into the market, prompting developers to launch the high-end properties in their inventories.

But analysts also warned that the current rebound in the property market may not be sustained.

“Activity remains confined within the residential market. This, in our view, is largely fuelled by softer prices and strong latent demand which alone will not be sufficient to sustain an overall recovery in the market,” said Mr Sim.

“Unless there are improvements in the overall economy, it may still take quite some time before we see the return of ‘super-luxury launches’ which may fetch an average $5,000 psf as affordability still remains the main factor to entice buyers.”

Source: Today, 16 June 2009