Tag Archives: Singapore Luxury Property

Singapore luxury property: A strong long term investment

Posted on 11 Jun 2011 | Comments Off on Singapore luxury property: A strong long term investment

The most costly landed properties in Singapore are on Sentosa Island.

Landed luxury properties are still hot and in demand due to scarcity of land in Singapore especially in prime areas. The costliest landed properties in Singapore are in Sentosa where sites are said to have exchanged hands for more than $2400 (US$1,95) psf. This is also because there is no restriction to foreign buyers purchasing land in Sentosa, which is not the case in the rest of Singapore. Foreign investors are also buying into the Singapore luxury segment as Asian countries introduce more measures to curb investment demand. China has been imposing the most measures to curb property prices and ever since we have been seeing more Chinese buying into luxury properties in Singapore in areas such as Marina Bay and Sentosa. However due to the Singapore government recently introducing new measures to stabilise the market, luxury real estate is seen as more of a longer term investment. With a strong economy, good rental yields and governance in place, Singapore is in an attractive location for foreign investors. Tourism is also increasing with more retail and hotel sectors thanks to Marina Bay Sands and Sentosa. With the Singapore economy continuing to grow and the inflow of foreigners into Singapore, the luxury segment is still a good buy.

Is the Singapore market cooling off?

Since the introduction of the new set of measures in January, sales volume has slowed slightly comparing to last year but prices have still been increasing at a healthy rate. The government’s intention is not to crash the market but to stabilise it. Prices of suburban properties (mass market) may correct about 5 per cent over the next year because of the large number of apartments in the pipeline. However the luxury segment will still hold well and climb up in price at a slow but healthy rate due to demand and supply. Expect the market response to remain positive due to the cheap credit environment and continued wealth increase because of the booming economy and wealth created from the en-bloc transaction from projects that are not priced too high.

The best opportunities and investment strategies in Singapore

With the near completion of Marina Bay Financial Centre, Ocean Financial Centre and Asia Square 1 and 2 will push up demand for residential properties in Marina Bay, such as Marina Bay Residences, Marina Bay Suites, The Sail and One Shenton. Prices have still not been realised yet in the Marina Bay area if you compare it with other luxury apartments outside the Bay area.

It would also be a good time to jump into industrial properties which have just started picking up in price and rental over  the past 2-3 months.  The active investment market for industrial properties in the first quarter is a good sign for demand in this sector.  However prime warehouse space is still more affordable than in Hong Kong and still a good opportunity if you’re looking into investing in Singapore. Industrial property that is still a good buy would be Pantech Business Hub (next to the port) and the Macpherson area.

Source : SEAPR – 8 Jun 2011

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Luxury properties prove a tough sell

Posted on 7 Jun 2011 | Comments Off on Luxury properties prove a tough sell

Sales of luxury properties in Singapore seems to be losing its shine and has slowed down in recent weeks. That is according to industry players who say that the segment has underperformed despite the overall property boom last year.

Analysts said most buyers of luxury properties here, mainly foreign investors, are turning cautious about buying their next multi-million dollar home due to the uncertain global economy.

Hamilton Scotts is one of the most anticipated super luxury properties to be launched in the last three years. The project costs more than S$100 million and it features a S$20 million en suite car porch.

Each unit is selling between S$8 million and S$10 million each, or an average of S$3,800 per square foot. But sales at the Hamilton Scotts have been slow. Out of the 56 units in the property, only 19 have been sold at between S$3,000 and S$3,700 per square foot.

The freehold property was launched in mid-2008, in the heat of the Lehman Brothers crisis.

Sales of similar luxury properties have also been slow, with the upmarket development 8 Napier selling 27 out of the total 46 units. Its latest transaction was in April at S$3,000 per square foot.

Hamilton Scotts developer KOP properties said luxury property buyers have been cautious with their cash.

Leny Suparman, CEO of KOP Properties, said: “I have not shown people, the buyers and consumers, what this project really looks like. I think people are unsure about the car porch mechanism so I think we really need to show them the entire thing and to be able to fully showcase all the wonders of this project.

“For the past three years, despite the fact that we didn’t have a show flat, we have been selling very well off the floor plans and the sales gallery in our office, I think we have done very well.”

Liang Thow Ming, head of residential services at Credo Real Estate, said sales of luxury properties tend to be slower when compared with mass market home sales.

“If you look at properties of a price tag somewhere in the region of S$8 million to S$10 million, you don’t expect these units to fly off the shelf anyway. So I think the pace of sales at Hamilton Scotts is comparable to the general luxury market,” said Mr Liang.

But analysts said the luxury property segment will cool off further, this is after recovering slightly last year from the property downturn during the global financial crisis.

Mr Liang said: “Where foreign buying is concerned, and where the luxury end of the market is concerned, the global geopolitical situation have slowed the pace of foreigners wanting to buy properties, be it in Singapore or anywhere else. So generally, I think right now a lot of foreign buyers, they would probably not take the plunge so easily. Therefore, resulting in the luxury end market not being as vibrant as the rest of the market.”

In the last three quarters, prices of uncompleted non-landed core central region homes, which include most luxury properties, grew by three per cent. Prices have already surpassed their peaks in 2008.

This is a much slower growth compared with the 26 per cent increase in prices in the whole of 2007, during the last property boom.

Luxury properties in Asia did well the first quarter of this year, recording a 5.5 per cent price growth, well over the 0.9 per cent from the previous quarter.

But key cities in Southeast Asia, including Singapore as well as major cities in China, recorded negative price growth to just over one per cent. CBRE Richard Ellis attributes this to a slew of property cooling measures introduced in those territories.

Hong Kong and Guangzhou were the only cities that recorded a price growth surge at 4.3 per cent and 7.2 per cent for the quarter.

Despite the uncertain global economic outlook, Ms Suparman is positive that sales at the Hamilton Scotts will improve, once it is completed by December this year.

“I think it’s a little bit challenging for them but if you have a completed product, it’s much easier for them to feel the space and to imagine the kind of lifestyle. So I believe this could be picked up once all these luxury projects are completed,” said Ms Suparman

Analysts expect prices of central region luxury properties to climb slowly, by about five per cent this year.

Source : CNA – 7 Jun 2011

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