The dramatic improvement in sentiment has already resulted in property prices creeping up over the past two months, particularly in the secondary market. According to anecdotal evidence, owners are sticking to their asking prices, with some even withdrawing their properties from the market in the hope of fetching a higher price later on.
At the prestigious Ardmore Park, the bellwether for luxury condominiums, owners are now said to be asking for at least $2,200 psf, and even this is a moving target. According to a recent caveat, a unit on the 23rd floor changed hands in the resale market for $6.45 million, or $2,236 psf. Just three months ago in March, a unit two floors down was sold for $5.7 million, or $1,976 psf.
Even Ardmore II has seen sub-sale transactions coming back to the $2,000 psf level, with the most recent caveat for a 15th floor apartment at $2,099 psf.
Meanwhile, prices have firmed up at St Regis Residences. Units in the resale market have been changing hands in the $2,100 psf range earlier this year. The most recent transaction was done at $2,200 psf, according to the most recent caveat.
Over at Cairnhill Crest in Cairnhill Circle, a 1,733 sq ft apartment on the 10th floor changed hands in the resale market at $2.46 million, or $1,420 psf, according to caveats lodged from May 15 to 22. Another similar-sized apartment but located on the 14th floor was sold for close to $2.6 million, or $1,500 psf.
Both apartments had changed hands at prices almost on a par with the original purchase prices four years ago, based on previous caveats lodged. The 10th floor apartment last changed hands in October 2005 for $2.503 million, or $1,444 psf. Meanwhile, the 14th floor apartment last changed hands in March 2006 for $2.69 million, or $1,552 psf The Metropolitan, the brand-new 382-unit, 99-year leasehold condominium located next to Redhill MRT station, unit prices are holding steady, and are back to the levels seen when it was first launched in late 2006. The two most recent caveats were those of a ninth floor apartment that changed hands at $1.08 million, or $772 psf, and a larger unit on the 20th floor that was sold for $1.43 million, or $820 psf. The owner of the 20th floor unit bought it in November 2006 when the project was launched and paid $1.32 million or $758 psf.
According to Citi Investment Research’s analyst Wendy Koh in her June 11 property report, resale prices of selected projects are up 10% from their lows and developers are reducing discounts at new launches. “With strong liquidity and the widening gap between Singapore and Hong Kong properties, the spike could extend to the luxury segment,” she says. “But it appears unsustainable given that supply scheduled for completion will reach a five-year high of more than 10,000 units in 2009 and will exceed 10,000 a year through to 2011.”
David Neubronner, executive director of residential at Credo Real Estate, says prices of mass and mid-tier projects have gone up 10% across the board. But buyers are still snapping up units “as they are worried that if they don’t buy today, they may have to pay a higher price tomorrow”, he observes.
Koh cautions, however, that “fundamentals will come back into focus when the euphoria wanes”.
Source: The Edge, 15 June 2009