Another good year seen for luxury condos

Top Print Edition Stories
Published January 17, 2007

Another good year seen for luxury condos

DTZ cites interest from foreign buyers and quality projects in the pipeline


By KALPANA RASHIWALA


(SINGAPORE) The high-end residential property market is expected to perform even better this year, after last year's 17.4 per cent increase in the average capital value of freehold luxury apartments in prime districts to $1,690 psf, DTZ says in a report.

The property consultancy group cites increasing foreign participation and numerous quality projects that will be launched, such as the luxury apartments at the Orchard Turn development and Wheelock's redevelopment of Scotts Shopping Centre and The Ascott Singapore. In addition, other projects will result from recent collective sales of prime sites such as Frasers Centrepoint's plots on St Thomas Walk and Ho Bee's project on the Orange Grove Condo site.

DTZ is also upbeat about prime residential rents because 'some owners whose developments have been collectively sold will rent, while waiting for their projects to complete'.

The firm estimates the average monthly rent of apartments/condos in the prime districts rose 14 per cent last year to $3.30 psf as companies continued to hire expats.

DTZ's research also shows the average capital value of prime district freehold apartments/condos rose 11.5 per cent last year to $960 psf.

Outside the prime districts, the average capital value of three-bedroom freehold apartments/condos rose 7.3 per cent last year to $585 psf, while that of 99-year leasehold units rose 6.7 per cent to $480 psf.

DTZ expects buying interest in the mass residential market to improve this year, underpinned by the positive economic outlook. 'This will support a broadbased recovery in the private residential market.'

The firm's executive director, Margaret Thean, is quoted in the report as saying: 'Buyers are today influenced by three main factors before they arrive at a decision to buy. Firstly, location; secondly, the product or development; and thirdly, the reliability of the developer.'

Market watchers say it is interesting that price does not feature among the factors cited, reflecting the exuberance seen at recent high-end residential launches.

Such launches have attracted queues, with buyers snapping up units at record prices without batting an eyelid. Many are speculators out to clinch choice units they hope to flip for a quick profit.