Luxury projects to dominate this year
CBRE data shows over 40% of homes will be launched in core central region
By UMA SHANKARI
DEVELOPERS are expected to push out a slew of high-end and luxury projects in 2010 as buying momentum starts returning to these segments of the property market.
Data from CB Richard Ellis (CBRE) shows that of the 7,975 landed and non-landed homes that are likely to be launched in 2010, more than 40 per cent of them are in Singapore's core central region (CCR), which includes the prime Districts 9 and 10, the financial district and Sentosa Cove.
A total of 3,469 homes will be in the CCR. Another 3,071 units are in the outside central region, which is a proxy for suburban mass-market locations. The remaining 1,435 homes are in the mid-tier rest of central region.
In contrast, most private home launches in 2009 were in the mass market.
'The first half of 2010 will see a wider spread of project launches from mass market, to city fringe and to prime locations,' said Joseph Tan, CBRE's executive director of residential.
'A lot of developers did not launch or re-launch their high-end and luxury projects last year as prices were down,' said Cushman & Wakefield Singapore managing director Donald Han.
'They were holding onto their projects because they could afford to. Now, with prices beginning to climb, we can expect more launches in these segments.'
According to Goldman Sachs, luxury homes prices here are still some 19 per cent below their 2007 peak, while prime and mass market home prices are 8 per cent and 4 per cent lower than their previous peaks respectively.
However, it is unclear if the take-up for luxury homes will be as strong as that seen during the 2007 boom. Back then, sales were fuelled by international buyers. But now, most developers and analysts agreed that foreign demand has not returned as strongly as hoped to the high-end and luxury market.
But sellers are still hopeful that the openings of the integrated resorts will once again kick-start more interest from international investors into Singapore.
The fact that luxury prices are still far from their peaks means that investing in Singapore will once again prove to be attractive to international buyers, Mr Han added.
Said UOB Kay Hian analyst Vikrant Pandey: 'The growing acceptance of Singapore as a choice destination to live and work will fuel prices further because property prices in Singapore are still significantly lower than those of key gateway cites of Monaco, London, New York, Hong Kong, Tokyo and Moscow.'
There is also a lot of speculation on the ground about how developers will replenish their landbanks once they start selling luxury and high-end homes once again. In 2006 and 2007, a scramble for prime residential sites led to a booming collective sales market.
'All developers we spoke to are looking to participate in the government land sales for 2010, as land banks have been run down in the strong buying momentum in 2009,' said Macquarie analysts Elaine Cheong and Soong Tuck Yin in a Jan 6 note.
'A few have lost out in 2009 tenders due to intense competition. We see overpaying for land as a key risk for developers in 2010.'
Some analysts believe that collective sales, which witnessed a slump in 2008 and 2009, with only one transaction compared to 116 in 2007, could stage a comeback in 2010 if the strong buying sentiment in the property market continues well into the year.
'We expect en bloc sales to make a comeback on the back of: rapidly falling inventory levels among developers; the H1 2010 government land sales programme (which) mainly targets the mass-market segment; a recent surge in high-end transactions; moderation in price expectations by collective sale home owners; and the transformation of Singapore into a top global city with the opening of the integrated resorts,' said UOB Kay Hian's Mr Pandey.
But Goldman Sachs said that the en bloc fever is not likely to return anytime soon.
'Developers' demand concerns still trump the need to replenish land banks, suggesting a new wave of en-bloc sales is not yet in sight,' said analysts Paul Lian and Rishab Bengani yesterday.
'As a group, developers made $2.5 billion in land purchases in 2009, flat over 2008, and some 75 per cent below 2006 peak levels, despite record take-up in 2009.'
Copyright © 2007 Singapore Press Holdings Ltd. All rights reserved
Posts
No comments:
Post a Comment