Prices of new luxury home projects rose by 20-25 percent in 2009 and this could increase further by 10-15 percent this year, according to CB Richard Ellis.
Meanwhile, rents of newly completed luxury homes, which declined 10.5 percent last year, could increase by 5-10 percent this year, said the property consulting firm.
CBRE also said that luxury home prices have been increasing in the first two months of 2010, citing sales of 35 units at The Laurels project going at $2,500-$2,900 psf and 88 units at Urban Suites going at $2,500 psf. Although units at The Laurels are much smaller, both projects are located in the Cairnhill area.
Other luxury home projects that are expected to be launched in the first half of this year include Nassim 8 and Ardmore 3.
Meanwhile, the Singapore residential property sector continues to teem with activities.
At Meyer Road, Hong Leong Holdings will launch nearly 60 upper-floor units at Aalto, a 196-unit freehold condo project. Prices for the 27-storey project start from $2,000 psf.
“Absolute pricing ranges from $3.1 million for a 1,442 sq ft three-bedder on the 18th floor to $5.3 million for a 24th level four-bedroom apartment of 1,959 sq ft,” said the company in a statement. Some lower-floor units are also available from $1,500 psf.
The said project was first launched in the early part of 2008 and as of end-January this year, it has sold 118 units. Aalto comprises three- to four-room units and penthouses, and is expected to achieve its Temporary Occupation Permit (TOP) by September this year.
Hiap Hoe Group also launched its Waterscape at Cavenagh this week. So far, the 200-unit project has already sold 96 units at an average selling price of $1,880 psf. The seven-storey freehold condo comprises one-to four-room units and penthouses.
The company will also launch a 202-unit project in the former Ong Building site at 76 Shenton Way later this month. Nathan Suites, a 24-storey joint venture project between Mitsui Fudosan and Hong Leong is also expected to open for preview soon.
CBRE pointed that the recent sales activities marks the revival of the luxury home segment. “’It is likely that this interest in luxury homes is sustainable given the low interest rates and improving economic environment,” said Li Hiaw Ho, CBRE’s executive director.
But he predicts that “’we are unlikely to see runaway prices the way we did in 2007 as homebuyers will be less impulsive and more discerning following the latest government measures,” to cool down the market.
The average price for newly launched luxury home projects has jumped from $1,800-$2,600 psf in 2006 to $2,000-$4,000 psf in 2007.
In Q4, foreign buyers returned to upmarket property launches in Singapore, as seen at Urban Suites, Marina Bay Suites and Kasara the Lake – the plush villa project at Sentosa Cove.
In China, luxury home prices in the secondary market edged up in Beijing, Guangzhou, Shanghai and Hong Kong by 6-10 percent in Q4 2009, compared with the previous quarters.
Looking forward, CBRE forecasts that investors and end-users may adopt a more cautious approach in the next several months, after the introduction of measures that will tighten lending in the property market.