Value of transacted luxury properties up 45% in first half of 2017

SINGAPORE — High-end real estate transactions have gone up by 45 per cent in value in the first six months of the year, compared with the same period last year, according to List Sotheby’s International Realty, Singapore. The realtor, which specialises in luxury residential properties, noted that interest in exclusive good class bungalows (GCBs) and bungalows at Sentosa Cove has picked up in the first half of the year.

Based on caveats lodged, 20 GCBs and seven bungalows at Sentosa Cove have been transacted in the first six months of the year, compared with 14 GCBs and none at Sentosa Cove over the same period last year.

At this pace, said the realtor, the GCB market this year could perform better than last year, which clocked in a total sales volume of 37 GCBs.

As for Sentosa Cove, the bungalow market has already outperformed the 2016 sales volume, it added.

The 20 GCBs sold in the first half of the year amounted to an investment value of S$432.21 million or S$1,242 psf on land area. This compares with the value of S$298.36 million or S$1,318 psf for the 14 GCBs sold in the same period last year, said a report by the company.

Mr Leong Boon Hoe, chief operating officer of List Sotheby’s International Realty, Singapore said: “Based on current market conditions, we believe foreign investors still find Singapore properties an attractive option. This can be substantiated by the 545 caveats lodged by permanent resident and foreign buyers in the core central region in the first half of 2017.”

According to Mr Leong, this represents a 22 per cent year-on-year increase by the same group. Excluding Singaporeans, the top five nationalities who bought residential properties in the first half of the year were mainland Chinese, Malaysians, Indonesians, North Americans and Hong Kongers.

Mr Ismail Gafoor, CEO of PropNex Realty has noticed a marked improvement in sentiment in the high-end housing market, with “significantly more successful transactions” conducted in the past month. According to Mr Ismail, PropNex Realty has closed “more than 10” deals over the S$5 million benchmark in June, including properties at Sentosa Cove, Gramercy Park and Parkview Eclat on Grange Road.

“The market has rebounded with a mixture of Singaporeans and foreigners picking up units in the core central region. Current prices are 20 to 25 per cent lower than the peak period four years ago,” he noted, adding that market sentiment is more positive after the aggressive land bids seen earlier this year, which showed that price movement would increase in new launches.

Mr Chris Koh, director of property consultancy Chris International, has observed a price drop of around 15 per cent in the high-end residential segment since June 2013.

“The savings can be quite substantial when you’re talking about deals worth millions,” he pointed out. For example, investors could stand to save S$1.5 million on a S$10 million transaction, compared with four years ago, he said.

“The four-year period between June 2013 and June this year has seen one of the longest decline in prices,” said Mr Koh. In comparison, the property market after the 1998 Asian Financial Crisis took two years to recover, while the recovery from the Lehman Brothers crisis in 2008 took one-and-a-half years, he said.