WHILE the prices of luxury private homes are heading south, DBS Vickers foresees that those of mass-market projects may start rising by the second half of the year.
In a property research report yesterday, the brokerage said of the mass-market residential segment: “We believe that clearing levels have been reached. Should demand continue to be sustained, this segment is likely to see positive price increase by H2 ‘09.”
Over the past three months starting February, the private residential market enjoyed strong sales with over 1,000 units sold monthly. The good showing was led by the mass-market and mid-tier segments.
“As sentiment and confidence improves, the property market should also benefit,” said DBS Vickers, citing a growing view among economists that the first quarter already witnessed the worst of gross domestic product data.
But it feels the high-end sector is “still dormant”, with activity remaining “subdued” for the next few months. “2010 is an important indicator as the potential of default risk could hit completing projects that were purchased at peak prices.”
Still, there are signs of the luxury segment stirring. Official data showed developers launched five times as many high-end units in April compared to March. Where buyer demand was strong, attractive pricing is usually a reason.
Frasers Centrepoint Homes itself said so in a press release yesterday on the take-up of its luxury project, Martin Place Residences: It sold 80 out of the 100 units during a soft launch over this past weekend, priced at $1,260 to $1,700 per square foot (psf), it said.
That is significantly lower than the price range of $1,700 to $2,000 psf for the 28 units sold last year.
Frasers said Singaporeans made up 62 per cent of the buyers during the soft launch, while the remainder were foreigners and Permanent Residents.
Source: Business Times, 19 May 2009
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