Feb 5, 2007

New Orchard area condos set to hit $3,000 psf mark

Launches of posh projects such as Beaufort on Nassim keenly awaited

By Fiona Chan

A SLEW of upcoming projects in the Orchard Road area is expected to set new benchmark prices for homes in Singapore.

Developers and other market players have indicated that there will be a number of launches in the area at around $3,000 per sq ft (psf) - a psychological price barrier that has only been breached by a few units in super-posh projects so far.

These launches will be keenly watched as almost every developer in Singapore has an upcoming development in the Orchard Road area, touted as this year's property hotspot.

Among these pricey projects are Beaufort on Nassim and The Marq on Paterson Hill.

Sources also said that the new condominiums being built on the former Scotts Shopping Centre and Angullia Mansion sites are likely to be as costly.

Orchard Turn, which developer CapitaLand will reveal more details about today, may also price at least some of its units above $3,000 psf.

These new expensive projects are justifying their mammoth price-tags by carrying some of the most exclusive addresses in Singapore.

Mostly boutique developments with fewer than 100 units, they are located in the exclusive enclaves of Angullia Park, Nassim Road, Scotts Road and Orchard Road.

The Orchard Road area is expected to see home prices rise once these pricey projects are launched, say market watchers.

Once the market accepts the $3,000 psf price tag for these new projects, it is only a matter of time before units in other luxury developments in the area also cross that mark, they noted.

To date, only a handful of units at St Regis Residences in Cuscaden Road and Marina Bay Residences have sold above the $3,000 psf level.

But is there a big enough market for so many pricey homes?

Consultants such as Mr Ku Swee Yong, director of marketing and business development at consultancy Savills Singapore, believe so.

'There is an increasing number of ultra-high net worth individuals who are looking at Singapore property and can easily pay these prices,' he said.

Most of the projects targeted at this market are 'very exclusive' and have only a few units anyway, he added.

Prices are also being bumped up as developers go all out on luxury interiors and designs to attract buyers, he said.

He expects home prices along Orchard Road to rise steadily throughout the year, adding that some developers might wait for new price benchmarks to be set before launching their own projects so as to take full advantage of improving market sentiment.

But other industry experts warn that the market in Singapore may still be too small to absorb numerous homes at $3,000 psf.

'There will definitely be some units at each project that will have this high price,' said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

'But it is unlikely that whole developments will cross this level because the number of people willing to pay this kind of price is quite limited.'

Mr Mak added that price rises may be restrained by an unusually large supply of new homes in Orchard Road over the next few years.

He noted that developers sometimes 'raise price expectations first' and then hold launches at a lower price.

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