Hallmark Residences (Photo: Christopher Chitty)
There seems to be a perfect storm brewing at the top of many luxury developments around Singapore. A combination of factors has seen a surge of interest in penthouses, even while property prices have, on the whole, fallen to 2009 levels.
Firstly, there has been an uptick in the overall housing market in the past few months. January, for example, saw a 17.6 percent increase in unit sales year-on-year, surely a good sign. But when one enters the land of the penthouse, things change even more.
There is an oversupply in standard units across the country, which suggests prices may fall yet further, increasing purchases as the market reaches the optimal price point for many buyers. This is even more true for penthouses. Penthouse prices have been falling steadily for the past five years – 20 percent down – while luxury homes in London, New York and Hong Kong have steadily risen.
The end result is that for the super-rich, a Singaporean pad is a bargain.
There is also the case that even at the top end of the market, distressed sales are not as uncommon as you might think. Recent activity suggests that some sellers are willing to take a hit. In Q4 one buyer snapped up a four-bedroom duplex penthouse at Seascape at Sentosa Cove for $6.35 million, down from the $11 million paid by the previous owner in December 2011.
This also shows the increased popularity of auctions. Distressed sales tend to be made at auction, and sales for the fourth quarter of 2016 reached $47.2 million, or 51 percent of the year’s entire sale value. If you have cash and are ready to make a quick sale, including dropping 10 percent down on the day, this is one place to get that penthouse bargain.
But it is not always the case that someone loses. For their part, developers have been much more willing to be creative and help buyers make the decision.
Bedok Residences penthouse
For example, schemes where buyers pay a 20 percent option-to-purchase fee, with a two year period to exercise that option are now increasingly common. Buyers can also sign a master tenancy agreement with developers, allowing them to rent out units without fuss.
Straight forward discounting has also become much more normal, with reports of up to 12 percent reductions available, plus developers absorbing a buyers’ property tax and two years of maintenance fees.
Further sweeteners include penthouses that now come with serious perks like specialist design and furnishing. At the end of the day, it always pays to ask what enticements are available – and to suggest some of your own.
Christopher Chitty, Senior Content Specialist, edited this story
