Looking closely at the data prepared by Credo Real Estate, it has stated that the common prices of high-end housing projects have greatly declined compared to the suburban condo rates between the latter parts of 2007 and 2008 over the same period.
Credo’s reports claimed that average prices of high-end housing slid from 12 percent to 28 percent. Meanwhile, the existing unit market prices of other projects increased from 1 percent to 7 percent.
Analysts said prices of first-class residential properties soared previously within the bull-cycle and the increases were relatively high. In the case of the general home prices, they have declined. One veteran real estate consultant noted that what seems to have high market value during the bull-run can decrease quickly as the financial crisis strikes.
Kermit Singh, managing director of Credo Real Estate, said the prices of high-end properties are quite sensitive with high elasticity compared to the property cycles of common housing projects.
He added that market segmentation is a crucial factor in the buying preference of investors. Purchasing second-class condos is usually taken for personal use instead of utilising these for business purposes as for investment in high-end projects.
He noted that the demand is dependent on the increasing profiles of the global buyers and rich investors whether they would want to have high-end buildings for their investment or settle with mass-market infrastructure.
Singh pointed out that the cause for pushing the high-end prices up for the last three years could be the high turnover of many prime district sales between 2006 and 2007. This resulted in less demand to purchase prime lots with increased prices of high-end projects. Meanwhile, the recession added to the burden of most investors who delay or halt their purchases of high-end homes.