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mr funny
24-01-07, 14:07
Jan 24, 2007

1 in 3 homes launched this year will be a luxury unit

Mid-tier homes to take back seat as top-end segment continues rebound

By Joyce Teo, Property Correspondent


BUYERS will be homing in on luxury this year with about 30 per cent of upcoming residential properties here targeted at the top end.

The wealth of luxury units is well up on last year when only one in seven launches was for upscale units.

The increase reflects the dramatic rebound in Singapore's high-end property market last year, with many more activities to come in the next six months, said Ms Tay Huey Ying of property consultancy Colliers International yesterday.

Colliers expects 4,219 luxury homes costing at least $1,800 per sq ft (psf) to be launched this year - a sharp increase over last year when just 1,628 such units were put on the market.

There will also be more launches for homes one step down from luxury - known as high-end in the industry - which Colliers defines as costing between $1,000 psf and $1,799 psf.

Mass property launches - they go for under $650 psf - will also rise this year, said Ms Tay.

However, the proportion of launches in the mid-tier segment will plunge - from a 58 per cent share of the pie last year to just 25 per cent.

Last year, the luxury property segment enjoyed the highest take-up rate, of 81 per cent, compared with a 57 per cent take-up rate for mass market projects, said Ms Tay.

She told a construction and property seminar that there was little prospect of an oversupply of luxury units as the number of high net-worth individuals is growing steadily.

'With demand exceeding supply, there is a good chance that prices will continue to soar,' she said.

The buying frenzy seen late last year will continue for the next six months on the back of a strong line-up of launches, she said.

Upcoming luxury projects include Frasers Centrepoint's St Thomas Suites, CapitaLand's Orchard Turn Residences and Wheelock Properties' Scotts Square.

The market could take a breather and price growth may moderate, said Ms Tay, who then expects to see another bull run in the second half of 2009, with luxury prices possibly reaching $4,000 psf by the end of the decade.

She is not the first to predict such an increase. Savills Singapore's Mr Ku Swee Yong said late last year that he expects prices to cross $4,000 psf by the end of the decade.

At the same seminar yesterday, Mr Ku predicted that prices of mass market homes - which he defined as under $800 psf - will climb by 8 to 10 per cent this year, up from a 5 per cent increase last year.

Demand, he said, will be supported by some of those who have profited from collective sales recently.

Collective sales will tighten supply, which is seen as being limited until 2009, said Mr Ku, while capital values will also rise as vacancy rates in private homes keep falling.

'You won't see a mass market project launched at less than $600 psf next year,' he said.

However, there are still cheaper choices available for now. Frasers Centrepoint's latest launch, the 240-unit ClementiWoods Condominium, costs around $560 psf and is about 90 per cent sold.

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