Top Print Edition Stories
Published April 3, 2006

Only 3 condo projects top $2,000 psf
Most homes sold in past year stay below mark: study


(SINGAPORE) Much is being made of the stellar prices of high-end condominiums, but the sparkle could be just an illusion.

Over $2,000 psf: The Ladyhill ($2,086 psf), above, The Boulevard Residences ($2,199.6 psf) and Cairnhill Crest ($2,002.4 psf)

An analysis of prices of high-end residential developments over the past 12 months by Knight Frank reveals that only three registered prices have crossed $2,000 per square foot (psf).

These were The Boulevard Residences ($2,199.6) and The Ladyhill ($2,086), both by SC Global, and Cairnhill Crest by Cheung Kong Holdings ($2,002.4).

Other developments in the same vicinity like Grange Residences (Wheelock Properties), The Arc at Draycott (BS Capital) and The Light @ Cairnhill (Wing Tai Holdings) reached highs of between $1,669.7 and $1,996.4.

Although prices have been rising steadily, a big increase of about 20 per cent or $2,600 psf has recently been projected for a new development - St Regis Residences by City Developments Ltd (CDL).

If the projection is accurate, it would confirm the assertion of Knight Frank director of research and consultancy Nicholas Mak that: 'One project cannot pull up the prices of the whole market, but the whole market can push up the price of that one project.'

Some high-end developments - like CDL's The Sail @ Marina Bay or Centrepoint Properties' The Azure - have done well recently, but as Mr Mak notes, 'the number of buyers in this segment falls exponentially as the price goes up', perhaps explaining why there is still ample supply of apartments available.

Of course, some developers like SC Global are not in a hurry to sell off their units, preferring instead to wait for their asking price to be met. At the Boulevard Residences, launched in 2003, there are still about 10 units out of a total of 46 available.

The property market, especially the high-end segment which started to recover last year, seems to be sorting out its pricing. But this may take some time.

'As this is a rising market, developers have not launched all the units in their development. They are reserving some to be launched at higher prices at the right time. In fact, for most of the smaller developments, all units launched have been fully taken up,' says Tay Huey Ying, associate director (research and consultancy) at Colliers International.

Colin Tan, head of research at Chesterton International, expects CDL to push up the price of St Regis Residences to the upper limit as 'CDL will probably not be too troubled if sales are not as fast because they will want to maintain the right type of buyer too'.

Wheelock Properties' Ardmore Park holds the record for the highest-priced condominium - $2,400 psf in the mid 1990s. It is the closest equivalent to St Regis Residences in terms of prestige, and Mr Tan remembers that when Ardmore Park was launched in 1996, sales were initially slow because of the high prices and the government's anti-speculation measures. Foreign buyers and investors did eventually bite.

Recalling the heydays, Mr Tan says: 'They had four property marketing consultants working on the launch to drive up interest.'

Interest for St Regis Residences is similarly building up. CDL group general manager Chia Ngiang Hong revealed that its current waiting list of potential buyers outweighs the 173 units available, with many buyers expressing interest in purchasing more than one unit.

Wallace Chu, head of research at Savills Singapore, expects at least half the buyers of St Regis Residences to be foreigners. 'Already, at least 50 per cent of the buyers at Cairnhill Crest are foreigners.'

Looking at comparable high-end developments like The Arch in Hong Kong and The Knightsbridge in London, which are priced at about $5,600 psf and $4,400 psf respectively, Mr Chu points out that even though high-end property is expensive here, 'it is still comparatively cheaper than similar developments overseas'.

Property prices are a 'reflection of what the market can support', said Mr Chu, adding that The Boulevard Residences has already set the benchmark price of $2,199.6. Interestingly, this was set by a foreign buyer and Mr Chu says: 'It is unavoidable that a foreigner will set the future benchmark price as well.'

The impact of very high prices for the very high-end developments may, however, have little impact on the property market in general, simply because they are priced out of the reach of most Singaporeans, and are meant for the more voracious global investor known as 'high net worth individuals'.

'Depending on market response to St Regis Residences, more of such developments could mushroom and become part of the global property market scene where demand is largely from foreigners,' says Jones Lang LaSalle head of research (South Asia) Chua Yang Liang.

That Singapore could have a tier of property on a par with other global cities is exciting, but do not expect this segment to proliferate. 'Not all developers have the capacity or even the desire to jump on this bandwagon. Given the limited supply, the impact on the local market is probably negligible,' Dr Chua said.