Prices of luxury homes are predicted to come back to its 2007 high by the end of 2010 or perhaps next year.
This positive outlook is based on the assumption that the world economy will continue to improve, said City Developments Executive Chairman Kwek Leng Beng.
His prediction regarding the increase of high-end prices is not new. Many of the property consultants have been tipping an increase in the high-end sector this year. However, the level of optimism of an industry leader like Mr. Kwek could turn heads – and he insists that he is not simply speaking up the market for his own ends.
“People say I like to talk up the market. It is not that I like to talk up the market. It is that more often than not, I would say I am 90 percent correct in predicting the market.”
“This can only arise from my many years of experience, from the mistakes I learnt from, from the intuition that I have. I also understand the psychology of people,” he said.
In fact, Mr. Kwek doesn’t want to see the rapid increase of the prices. “I hope the increase will not be so dramatic as to provoke concerns.”
A return to the 2007 peak levels is possible at the end of this year, or if not, then by next year. “My reading is that the rich Chinese buyers will come one day.”
The opening of the integrated resorts (IRs) will help boost many foreigners, and some of them may decide to purchase a home in the country, said Mr. Kwek.
He feels that prices of luxury homes can easily increase by over 10 percent this year, as it is still 25 percent off the previous peak.
The higher the market goes, the greater the number of buyers there will be. Conversely, when the market drops to a low level, many will not want to purchase.
His predictions were, to a certain degree, shared by Tay Huey Ying, director of research at Colliers International.
She believes that prices of luxury homes could exceed the previous peak at the end of 2010 on an average basis.
“Our basket of super high-end or luxury homes peaked at $3,174 per sq ft (psf) in late 2007 and early 2008. As of the end of last year, our prices were only 9 per cent off the peak,” she said.
“However, this luxury segment is not likely to achieve another record price this year, given the expected modest growth in the global economy.”