SINGAPORE – Despite a general downturn in luxury condominium sales of late, a recent study showed that units in 11 luxury city-centre developments saw price gains of between 15 per cent and 136 per cent from 2006 to 2023.
Of the dozen developments of comparable size and age in districts 9 and 10 analysed by property portal Mogul.sg, just one – St Regis Residences – saw a decline in its median sq ft price.
Ardmore Park, a condo in Newton that was completed in 2001, emerged as the front runner. Its median price rose 135.8 per cent, more than doubling from $1,889 per sq ft (psf) in 2006 to $4,454 psf in September 2023.
Ardmore Park embodies some of the qualities of luxury condos that investors and tenants would appreciate, said Mogul.sg chief research officer Nicholas Mak.
It is in a prime location near busy Orchard Road and offers privacy at the same time. Furthermore, residents have the luxury of space both in terms of unit size, which is typically 2,885 sq ft, and a large land area that can accommodate a variety of recreational facilities, he said.
The developments selected ranged between 90 and 300 units, and all had resale transactions recorded for the 18-year period of the study, said Mr Mak.
Launched in 2006, St Regis Residences in Tanglin Road was the sole luxury complex that suffered a price contraction.
Its median price at launch was $2,552 psf, before it peaked at $3,100 psf in 2008. From January to September 2023, its median price fell to $2,460 psf, or 3.6 per cent lower than in 2006. The units range from 1,507 sq ft to 7,287 sq ft.
Explaining the price decline, Mr Mak said that with more than half of the 173 units at the 999-year leasehold development owned by companies or foreigners, and the high price tag of the units, getting Singapore buyers could be a challenge.
Ms Tricia Song, CBRE head of research for Singapore and South-east Asia, said it could also be due to its limited landscaping for a luxury project, and blocked views for some units as it is in a relatively tight plot flanked by the St Regis hotel and other buildings around it.
As St Regis Residences was the first luxury hotel-branded condo here and launched close to the peak of the property boom in 2007, its initial pricing reflected some premium, noted Ms Song.
In May 2007, a 6,017 sq ft duplex penthouse on the 22nd floor was sold to Japanese billionaire real estate developer Katsumi Tada, founder of Daisho, for $28 million ($4,653 psf), according to caveats lodged. Eight years later, in 2015, he sold the unit at a record loss of $15.8 million, or at $2,028 psf, to a Singaporean.
On Nov 1, a 1,507 sq ft unit on the 16th floor of the complex changed hands for $3.9 million. The seller who paid $5.5 million for the unit in 2007 saw a loss of $1.6 million, or 29 per cent of the original price.
Property salespeople who specialise in marketing luxury developments said foreign buyers with deep pockets generally prefer units with more privacy and green spaces in the surrounding areas. Many also seek newer projects.
Huttons property agent Quek Fu Jin, who is marketing two units at St Regis Residences, said he regards the good brand name, the layout and well-designed units as big selling points. However, some buyers want units with a view, which the lower-floor units may not have.
A November 2023 report on the luxury residential market by Huttons noted that 37 luxury condo units were sold for a collective $295.8 million from July to September, down from 63 units transacted for $601.9 million between April and June.
In the first nine months of 2023, a total of 222 luxury condos worth $1.82 billion changed hands. The transacted amount was about 25 per cent lower than the same period in 2022.
Mr Mark Yip, chief executive of Huttons Asia, said ongoing investigations into Singapore’s largest money laundering case, which was first reported in August, could have contributed to the slowdown in the sale of luxury homes. To date, 10 foreigners have been arrested and $2.8 billion in cash and assets has been seized.
Mr Yip noted that the case further eroded sentiments in the luxury homes market, which was already hit by the doubling of the additional buyer’s stamp duty (ABSD) for foreigners to 60 per cent in April.
Besides that, high interest rates and weak economic conditions could have also contributed to the slowdown in demand for luxury homes.
Said CBRE’s Ms Song: “In the near term, sales could remain muted amid the uncertain current situation. However, rental demand should remain strong as those who do not buy because of the prohibitive ABSD turn to renting instead.”
She also noted that there is a limited supply of new luxury developments in the pipeline.
She added: “In the longer term, growing wealth in the region and Singapore’s strong fundamentals as a business hub would continue to draw investors and genuine buyers looking for a safe haven to park their wealth and build their homes.”
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