SINGAPORE: Singapore’s luxury home prices, which have been the worst hit by the government’s property curbs in recent years, are finally showing signs of a recovery, according to developer Guocoland Ltd.
High-end home sales in the city-state had been on an upswing even before the government in March eased some of its cooling measures in place since 2009, according to Cheng Hsing Yao, group managing director at Guocoland. The changes in March may have added more fuel to the buying sentiment, he said.
“The change in sentiment wasn’t caused by the tweaking alone,” Cheng said in an interview in Singapore. “The tweaking has contributed but sales for our projects started picking up toward the end of last year.”
Singapore-listed Guocoland is part of Malaysia’s Hong Leong Group, a Kuala Lumpur-based conglomerate with interests in financial services, manufacturing, real estate and hotels.
The company is helmed by Malaysian billionaire Quek Leng Chan, whose fortune is worth about US$4.7 billion, according to the Bloomberg’s Billionaire Index. Guocoland develops luxury homes and offices in Singapore, Malaysia, China and Vietnam.
Guocoland acquired a prime Singapore land site for US$430 million a year ago, paying the highest price for a purely residential site in a government auction since 2009.
It will start marketing its 450-unit Martin Modern project on this site on July 22 and expects to complete construction by 2021. Cheng expects that the majority of the apartments will be bought by Singaporeans and Singapore-based permanent residents.
“Demand is there, with lots of people waiting on the sidelines,” Cheng said.
“Prices have bottomed, and we can see a slight firming up already. The relative value of high-end properties has become attractive, as the price gap between mass-market and luxury homes has narrowed.”
Cushman & Wakefield Inc defines luxury homes as being in prime districts, with sizes of at least 2,000 square feet, and prices starting at S$1,500 per square foot. Prices of such homes have dropped between 15% and 20% from their peak in 2013, the broker said.
Singapore home prices fell in the three months ended June, extending the drop in property values to a record 15th quarter as most measures to cool the market remain in place despite the slight loosening in March. Prices in prime areas declined 0.9% in the period, data released by the Urban Redevelopment Authority on July 3 showed.
In March, the government reduced stamp duty imposed on sellers, helping stoke optimism that Singapore’s property market is rebounding, with home sales jumping and developers making more aggressive bids at land auctions.
Still, the Monetary Authority of Singapore cautioned that the adjustments earlier this year don’t signal an unwinding of the measures.
“Many countries have started to introduce their own versions of cooling measures. In terms of pricing, Singapore is quite attractive when compared to Hong Kong and some of the cities in China,” Cheng said.