Those looking to buy into high-end living will have more options, with the launch of “The Residences at W Singapore” at Sentosa Cove this weekend.
With luxury homes touted to be star performers of 2010, market watchers expect developers to roll out more of them in coming months.
This could run down their land bank and drive up collective sales later in the year.
The launch of “The Residences at W Singapore” at Sentosa Cove suggests that developers are gearing up for a rebounding luxury property segment.
City Developments has priced its residential units there at S$2,500 to S$3,000 per square foot, at the high end of recent high end launches.
With demand returning for the high end luxury market, developer City Developments said it is looking to grow its presence in the segment.
“We had a very strong proportion of luxurious apartment during the 2006-07 period and subsequently we were concentrating quite a bit on the middle class and the upgraders. But now we are coming back to the luxury category. In fact, the prices here are about 20-25% below the 2007 peak, and we believe the sentiments are very positive now,” said Chia Ngiang Hong, group GM at City Developments.
Mass and mid-tier property values are now about 5-8 per cent above the peaks of 2008.
And analysts said the high end is likely to catch up this year, mostly when the second integrated resort, Marina Bay Sands, is open for business.
Analysts said developers are likely to grow their presence in the luxury market to capitalise on rising prices.
“By and large, we are seeing a trickling effect of take-up… Probably (by) the second half of this year… we’ll see the major luxury market starts to get sold out and developers will start to look at replenishing the land bank process,” said Donald Han, marketing director at Cushman & Wakefield.
Market watchers, however, said residential rental prices will need to pick up first in order for prices of luxury residential property values to rise.
According to Cushman & Wakefield, rental prices have already started picking up in selected areas by 5-10 per cent so far this year.
Macquarie has raised its target price for City Developments to $9.44 and its earnings per share estimate for this year by 50 per cent, citing increased selling prices for new project launches.
But Macquarie has kept its “underperform” rating on City developments, saying higher property prices could mean more cooling measures from the authorities.
Source: Channel News Asia, 25 Mar 2010