High-end and luxury home prices hit a new all-time record in the fourth quarter of 2010.
Non-landed home prices in the Core Central Region (CCR) micro-market, which comprises prime districts like Sentosa Cove and Marina Bay, were up 2.3 percent in Q4, compared to the 1.6 percent increase in the previous quarter.
This helped luxury home prices achieve a new all-time high, surpassing the previous peak in Q1 2008.
Meanwhile, the price index for the Rest of Central Region (RCR) climbed 1.7 percent in Q4, compared to the 2.3 percent growth in Q3. Prices in the Outside Central Region (OCR), where suburban condominiums are located, rose 1.6 percent in Q4, compared to the 2.2 percent gain in the previous quarter.
Analysts said the slowdown in price growth in the OCR and RCR areas are due to the resistance from buyers for increasingly expensive projects.
By contrast, prices in the CCR region grew on the back of the strong economy and low interest rates, which again attracted foreign investors to acquire luxury properties in Singapore.
“In 2010, much of the activity was focused on the mass and mid-market segments,” said Joseph Tan, executive director for residential at CBRE. “Foreigners stayed away, thinking that the lack of transaction activity in the high-end segment would lead to a fall in prices and allow them to buy the properties for less.”
However, since the majority of high-end home owners had “holding power”, the expected decline in luxury home prices did not happen and foreign buyers are gradually returning to the luxury market, said Mr. Tan.
Png Poh Soon, head of consultancy and research at Knight Frank, said the number of foreign home buyers surged by 14 percent in 2010 compared to 2009.
“The tightened regulations in Hong Kong and aggressive anti-speculation rules in China caused some investors to shy away from those markets and directed them to Singapore,” said Mr. Png. “High net worth foreign buyers would definitely consider the Singapore property market to park their money.”