A unit at The Sail was sold for $1,475 psf in February, the lowest price in more than five years. (Photo: Nicolas Lannuzel / Wikimedia Commons)
Prices of high-end condominiums in Singapore have slumped to new lows as owners dispose their units due to falling rents, reported The Straits Times.
For instance, a four-bedroom unit measuring around 3,000 sq ft at Cairnhill Plaza is understood to have been sold for about $1,300 psf, a price not seen since 2007.
A 678 sq ft studio apartment at The Sail @ Marina Bay also changed hands in February for $1,475 psf, the lowest price in more than five years.
Although the previous owner of the apartment at The Sail is unlikely to have incurred losses, as units there were originally priced at $900 psf during its launch in 2004, other sellers have suffered losses in the past few months.
For example, all three deals at Orange Grove Residences so far this year reported losses of nearly $1 million each.
Data shows that 63 second-hand condos were sold at a loss during Q1 2016 in the Core Central Region (CCR), which includes Sentosa Cove and the downtown core, compared to 60 in the previous quarter.
According to experts, a major reason for the significant drop in luxury home prices is the large supply and sluggish rental demand.
“Many of the apartments are vacant and it is quite difficult to get leases renewed at a good rate. The returns are not that great and if owners have made capital gains, it may be time to recycle (the asset),” said Suzie Mok, Senior Director of Investment Sales at Savills Singapore.
Furthermore, expatriates arriving nowadays are usually at the middle-management or executive level, but with smaller housing budgets than in the past, noted Desmond Sim, CBRE’s Research Head for Singapore and Southeast Asia.
As such, demand for large and posh condos that are common in the CCR has weakened substantially, he added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
