Transactions of luxury condo double in first half of 2016.
Condo transactions of S$10 million and above in the January-June period are up sharply from a year ago, marking the strongest showing since the second half of 2013. The strong pick-up was fuelled largely by foreign buying, attractive pricing and a general improvement in property market sentiment in recent months.
According to URA Realis caveats data, 19 condos were sold for at least S$10 million each, adding up to S$259 million - more than double the eight transactions totalling S$103 million in H2 2015. The H1 performance is the best since the 21 deals worth S$265 million in H2 2013.
The actual H1 number may be higher as caveats have not been lodged for some high-priced deals, BT understands. Industry observers generally expect the momentum to continue in the second half - though they are not anticipating a big surge. To begin with, the stock of ultra-luxe condos on the island is limited, said a seasoned property consultant.
Another consultant said that since the start of June this year, he has noticed a stirring of activity in the S$10 million or more price range for non-landed properties in the prime districts. Previously, most deals were mainly centred around the S$5 million price range.
Buyer nationalities are a mix of Singaporeans, Chinese and Indonesians; the latter have been more active in the past week as they came to town during the Hari Raya holidays in Indonesia.
Among H1's big-ticket condo deals were two last month at The Nassim - at S$20.25 million and S$13.73 million. The larger transaction, which works out to S$2,248 per square foot, is for a ground-floor unit of five bedrooms; about half of the unit's 9,009 sq ft strata area is accounted for by private enclosed spaces and three basement carpark lots. The smaller transaction, for a 4,273 sq ft unit on the fourth level, translates to S$3,214 psf.
The ground-floor unit is understood to have been picked up Sigid Wonowidjojo while a relative bought the fourth floor unit. Mr Wonowidjojo's family controls Indonesian cigarette maker Gudang Garam. Both units in the five-storey freehold project, on the former ANA Hotel site on Nassim Hill, were sold by developer CapitaLand. The project received Temporary Occupation Permit (TOP) in August last year.
Just behind The Nassim, two units at the completed Nassim Park Residences, also a low-rise freehold luxury condominium project, changed hands last month for S$12 million (or S$3,451 psf) and S$12.25 million (S$3,523 psf). The two apartments were sold by a family (Indian citizens) to Naina Buxani, who co-founded the Temptations Jewellery business in Hong Kong and which now has a presence in Singapore.
Ms Buxani is understood to be the wife of Mahesh Buxani, who last year shelled out S$22.5 million or S$3,271 psf for a 6,900 sq ft penthouse in the same development; the luxurious duplex comes with its own pool.
Two units were also sold at Tomlinson Heights recently - at S$11.9 million and S$11.53 million.
In February this year, three units were transacted at Boulevard Vue along Cuscaden Walk at S$3,280-3,550 psf. In the same month, an apartment at St Regis Residences Singapore around the 20th floor was sold for S$15 million or S$2,706 psf to an Indonesian.
Also in February, a company said to be linked to Akbar Khan, who was in the limelight here in the late 1990s when he came up with a plan to free up frozen Clob shares, acquired a four-bedroom apartment above the 20th level at the completed TwentyOne Angullia Park for slightly over S$12.05 million or S$3,600 psf.
The unit was sold by the project's developer, a unit of China Sonangol. To date, the developer has sold 10 of the project's 54 units. It is understood to have trimmed the average price by 10 per cent to S$3,600 psf this year - from S$4,000 psf in 2012-2013.
According to market talk, GuocoLand recently sold two penthouses at Goodwood Residence and a unit at Leedon Residence - all three at above S$10 million each. Caveats have not been lodged for these transactions.
Property agents and developers told BT that new Singapore citizens and foreigners are dominating condo purchases in the S$10 million and above band. Foreigners are drawn to higher price range condos as they see an opportunity to own a trophy home in Singapore's prime residential districts.
In the price range (S$10 million or more), Singaporeans would prefer to go for landed properties.
Foreigners require government approval to buy a landed residential property in Singapore.
The top two nationalities of foreign buyers of luxe condos so far this year would be Indonesians and Chinese, who are likely to have bought for capital preservation.
Well-heeled foreigners are looking for properties in good locations and which are well designed and finished. They are predominantly end-users. It could be their primary residence, a secondary home, a place for their children to live in while they study here.
People with money still believe in real estate and they want a safe haven. Singapore has a stable currency, good governance, a transparent property market. It ticks all the boxes. These buyers just need to see the right real estate - and there's not many.
Foreign buyers were initially loathe to pay the 15 per cent additional buyer's stamp duty that kicked in in early-2013 but they seem to have come around to the view that Singapore's stamp duty/taxes for residential property purchases are not the highest among global cities.
Another point to note is that sellers - whether developers or individuals - have generally adjusted their price expectations downwards. For instance, CapitaLand began selling The Nassim this year at about S$3,200 psf on average. It was rumoured to have been considering S$4,000 psf a few years ago given the ultra-prime Nassim address.
Adapted from: The Business Times, 15 July 2016