(SINGAPORE) Buyers have been flocking to private apartments priced below $800,000 in recent months. Some may fork out a bit more, but with the economy still in the doldrums, most start getting cold feet when prices reach $1 million to $1.5 million.
According to property consultancy DTZ, units selling for $600,000-plus to $800,000 were the most popular from January to April. In DTZ's analysis of 4,401 caveats captured by the Urban Redevelopment Authority's Realis system, 1,515 or 34 per cent were lodged for apartments in this price range.
Of these 1,515 caveats, 92 per cent were for units outside prime districts 1, 4, 9, 10 and 11. And 93 per cent were for units of less than 1,400 sq ft.
Projects where plenty of recently released units were in the sweet price range include Double Bay Residences in Simei, Mi Casa in Choa Chu Kang and Waterfront Waves in the Bedok Reservoir area, DTZ said.
For instance, 95 of 171 caveats lodged for Double Bay Residences (56 per cent) involved units priced from $600,000-plus to $800,000.
Savills (Singapore) has reached a similar conclusion from its own study of caveats - units below $800,000 have been most popular in the outside central and rest of central regions.
Even in the core central region, it has been possible to find smaller units for less than $800,000 - and buyers favour them. At The Mercury near River Valley, for instance, 27 of 38 caveats lodged (71 per cent) were for units priced below this level.
Anecdotally, buyers at recent launches seem to be more concerned about overall cost - smaller units with higher per sq ft (psf) prices have been selling faster than larger units with lower psf prices in some cases.
Savills' research and consultancy associate director Priya Sengupta said tighter credit means buyers consider the affordability of units in absolute and psf terms.
'Psf price acts as an impetus to generate interest and keenness or affinity to a certain location or a certain development, whereas quantum comes into play during the buying decision,' Ms Sengupta said.
Based on DTZ and Savills' studies, buyer resistance generally sets in at $1 million to $1.5 million. DTZ noted that only 16 per cent of the 4,401 caveats lodged from January to April were for units costing $1 million-plus to $1.5 million, while a mere 5 per cent were for units costing $1.5 million-plus to $2 million.
With high-end property stirring in the past few weeks, could the resistance level be on the way up? Data is not available because it takes time for caveats to be lodged and captured.
But according to Knight Frank's director of research and consultancy Nicholas Mak: 'It appears so because more people are exploring the market.'
Still, he laced his observation with caution: 'This is often (due to) a bit of spillover from the stock market, which can be fairly volatile. It is also based on the expectation that the Singapore economy is going to recover year-end or so - but the government is not of the opinion.'
Announcing Singapore's first-quarter GDP figures recently, the Trade and Industry Ministry said there are still no decisive signs of recovery.
Of course, buyer resistance is unlikely to apply as far as the ultra-rich are concerned. DTZ's data shows 4 per cent of caveats in January to April were lodged for units worth more than $2.5 million. These include caveats for three apartments at Ardmore Park each worth more than $5 million. There were also caveats for 23 Gallop Gables units priced from $2.5 million to $4 million.
Source: Business Times, 1 Jun 2009