Image: Luxury homes in Singapore
While it has taken a beating from the government’s property cooling measures in recent years, luxury home prices in Singapore are now showing signs of recovery, reported Bloomberg.
In fact, luxury home sales had been on the upswing even before some of the cooling measures were eased by the government in March, said Guocoland group managing director Cheng Hsing Yao.
He believes the easing in March added fuel to the buying sentiment.
“The change in sentiment wasn’t caused by the tweaking alone,” said Cheng. “The tweaking has contributed but sales for our projects started picking up toward the end of last year.”
Guocoland is set to launch its 450-unit Martin Modern project, which is nestled on a site it acquired for S$595 million last year. It was the highest paid in a government auction for a purely residential site since 2009, on 22 July. Cheng expects majority of the units to be acquired by Singapore-based permanent residents and Singaporeans.
“Demand is there, with lots of people waiting on the sidelines,” he said. “Prices have bottomed, and we can see a slight firming up already.”
And given the narrowing of the price gap between mass market and high-end homes, the relative value of luxury properties is now attractive, he added.
According to Cushman & Wakefield, luxury homes refer to houses in prime districts measuring at least 2,000 sq ft. and priced from S$1,500 per sq ft. The broker noted that the prices of such homes fell by 15% to 20% from their 2013 peak.
This comes as Singapore home prices extended their fall to a record 15th quarter in Q2 2017 as the government kept most of the cooling measures in March. Urban Redevelopment Authority data showed that prices in prime areas fell by 0.9%.
But while the reduction of stamp duty imposed on sellers in March stoked optimism that the property market is on the rebound, with developers aggressively bidding at land auctions and home sales jumping, the central bank said the adjustments does not signal an unwinding of the curbs.
“Many countries have started to introduce their own versions of cooling measures. In terms of pricing, Singapore is quite attractive when compared to Hong Kong and some of the cities in China,” said Cheng.
Senior Content Specialist, Christopher Chitty, edited this story