Fifty-five per cent of about 2,200 units in luxury projects launched by developers between 2006 and 2008 remained unsold in November 2008, according to CB Richard Ellis (CBRE).
And the property consultancy firm is tipping a 10-15 per cent fall this year in the price of luxury apartments/condos, which slid to about $2,000 to $2,400 psf of strata area in Q4 last year from $2,000-3,300 psf a year earlier.
The figures refer to existing luxury developments such as Ardmore Park, Four Seasons Park and Grange Residences.
As for new luxury condos/apartments, the average launch price fell to $2,000 to $2,600 psf in Q4 2008 from $2,000 to $4,000 psf in Q4 2007, says CBRE.
Caveats for only 1,096 luxury apartments/condos in prime districts 9 and 10 were lodged in 2008 based on filings by Jan 7, 2009 - a mere 19 per cent and 32 per cent of sales in 2007 and 2006 respectively.
The number of apartments sold for more than $10 million dropped to 82 last year from 143 in 2007. Still, the 2008 figure was above the 22 units sold in 2006.
Most luxury projects launched in 2006 and early 2007 are fully sold, such as Ardmore II and Tate Residences.
But several projects, particularly those released during or after second-half 2007, remain on the market. 'By then, news of the sub-prime crisis had caused the market to pull the brakes,' CBRE said.
In the landed housing segment, the firm predicts a drop of about 10 per cent this year in the price of Good Class Bungalows (GCBs).
Last year, the average price of GCBs rose 20.7 per cent to a record $822 per sq ft (psf) of land area.
'GCB prices recorded very strong growth in 2006-7,' said CBRE director (luxury homes) Douglas Wong. 'This upswing in prices spilled over into the first half of last year. Right up to July 2008, average GCB prices continued to raise the benchmark.
'Also, the capacity of owners to hold prices added to the resilience in this segment in the second half of 2008.'
The highest psf price in a GCB transaction last year was $1,303 for a property in Leedon Road with only 21,097 sq ft of land. In absolute price terms, it fetched $27.5 million.
The all-time record price for a GCB in Singapore is $1,899 psf, set in October 2007 when 32H Nassim Road was sold for $25.5 million.
While the average price of GCBs rose last year, the number and value of transactions fell.
Forty-nine GCBs changed hands for a total of $785 million in 2008, down from 87 worth $1.15 billion in 2007 and 119 worth $1.23 billion in 2006.
CBRE said: 'Going forward, we expect the activity in the luxury residential market to be lukewarm, similar to the pace in H2 2008. Hence, the number of GCBs and luxury apartments transacted will be small.'
Source: Business Times - Jan 8 2009