ST : not yet sold out

Nov 22, 2010

not yet sold out

Still no buyers for 1,000 posh homes

By Esther Teo


MANY high-end condominium units are sitting unsold even after completion, as the luxury home market remains quieter than in previous years.

Twelve developments have been completed this year, each with more than 10 units still unsold as of last month, according to new data released by property consultancy CB Richard Ellis (CBRE).

Of these, 10 are in prime areas, with a total of 384 unsold units, CBRE said.

For instance, Wing Tai's Belle Vue Residences in Oxley Walk, which obtained its temporary occupation permit (TOP) in the second quarter, has not found buyers for 61 of its 176 units as of last month.

Paterson Suites, which had its TOP in the third quarter, has 79 units out of 102 yet to be taken up.

Another eight projects are expected to receive TOP soon, each with at least 10 unsold units, added CBRE.

Seven of these are also in prime locations: Districts 9, 10 and 11 - which cover Orchard, Holland, Newton and Bukit Timah - and the Sentosa and Tanjong Pagar areas.

In all, buyers are still needed for more than 1,000 posh homes in projects already completed or expected to be ready by early next year.

Most of these projects were first launched in the property boom of 2007, including Riveria Gardens in River Valley and Marina Collection in Sentosa Cove.

Not all these completed units are available for sale, however.

Experts say that some developers have yet to launch their remaining units as prices are still below their previous peak.

Developers are biding their time, waiting for the luxury market to catch up with or even surpass the historical highs, they say.

CBRE Research executive director Li Hiaw Ho said that developers either slowed down or stopped sales completely when the financial crisis hit Singapore.

When the residential market recovered last year, developers were hopeful that high-end prices would recover and that foreign interest would return.

However, while high-end prices have seen a recovery this year, they are still below the previous peak.

Foreigners are also less active compared to 2007 because the United States and European economies are still weak, he added.

Colliers International's director of research and advisory Tay Huey Ying said that luxury home prices are now just 5.4 per cent shy of their peak in 2007. While volumes are still thin, prices are gradually creeping up, she added.

'Some developers might feel that it is not the right time to launch as demand is still not strong enough to push luxury home prices past their previous peak.'

In boom years, some developers might have bought residential land at 'aggressive prices' and are now waiting for home prices to catch up, Ms Tay added.

Cushman and Wakefield's managing director Donald Han said some of these projects might have seen a significant number of units sold at relatively high prices pre-crisis when they were first launched.

Developers thus had an obligation to these initial buyers not to offload the remaining units at a lower price.

Seeming over-eager to sell could also cause the market to lose confidence in the developer's holding power, he said.

'Once a development has sold about 50 to 60 per cent, it would most likely have broken even and there would be less pressure to dump units,' he said.

'Developers can also choose to keep units to rent out temporarily,' Mr Han added.

Experts added that unlike 99-year leasehold mass market condos that might depreciate after completion, many of the high-end projects had freehold tenure.

Some luxury home buyers are also keen to 'feel and touch' their homes and the quality of the finishes before making such pricey purchases.

This might give completed projects at least some kind of an edge over new launches, they said.

Ms Wendy Tang, Knight Frank director of residential services, added that with prime residential sites hard to come by, developers might also see no urgent need to dispose of high-end projects quickly as it might be difficult to replenish land banks with such exclusive sites.

esthert@sph.com.sg