Singapore’s luxury property market could see further price correction due to the rising number of unsold homes, amid a resurgence in investors that caused sales activity to double in Q2 2012.
According to Savills Research & Consultancy, as many as 4,000 luxury condominium units were completed last year in Orchard Road, which accounted for around seven percent of total non-landed stock in the luxury segment.
Of this figure, 16 percent or more than 600 units remain unsold, taking the total unsold stock in the prime segment to 12,855 units. This comprises 731 completed units and 12,124 uncompleted homes, 50 percent of which are ready to be launched.
Moreover, prices of new non-landed homes fell by five percent quarter-on-quarter to S$2,374 psf in Q1 2012 and dropped further to S$2,230 psf in Q2.
Mirroring the downward trend, 19 units at Paterson Suites were acquired at an average price of S$2,619 psf this year, down 10 percent from S$2,915 psf last year and 15 percent below the peak price in 2007.
Overall, 12 homes at Orchard View were sold at an average price of S$2,604 psf, a 21 percent drop from 2010’s peak. At the same time, four units at St Regis Residences were transacted at S$2,228 psf during 1H2012, a 28 percent drop from the peak.
Savills also noted that sales activity in all market segments rose significantly, with new sales surging 246 percent quarter-on-quarter to 235 units in Q2, resales up 86 percent to 585 units, and sub-sales climbing 34 percent to 94 units.
Aside from that, property launches are back in full swing following a sluggish 2011. Eight major projects generating about 1,200 new units have been launched so far this year, with the 510-unit V On Shenton being the largest, followed by the 180-unit 26 Newton, the 132-unit Eon Shenton and the 120-unit Stellar RV.
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