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Thread: Luxury homes reeling in buyers at attractive prices

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    Default Luxury homes reeling in buyers at attractive prices

    [url]http://www.straitstimes.com/PrimeNews/Story/STIStory_614746.html[/url]

    Dec 17, 2010

    [B][SIZE="5"]Luxury homes reeling in buyers at attractive prices[/SIZE][/B]

    By Esther Teo


    [SIZE="1"]Paterson Suites at Paterson Road saw five units sold at a median price of $3,369 psf in July 2007. Since then, prices have gone down and last month 41 units were sold at a median price of $2,661 psf. -- ST PHOTO: CHEW SENG KIM[/SIZE]

    THE property boom has still not lifted luxury home prices back to their 2007 levels, although units in upmarket projects are attracting buyers.

    It is far from a bargain-basement situation but developers are having to keep their expectations in check, and having to offer attractive prices.

    Take Bukit Sembawang's Paterson Suites, which was completed in the third quarter. There were 41 new units sold at a median price of $2,661 per sq ft (psf) last month.

    In July a 2,164 sq ft flat went for $7 million - or $3,232 psf.

    Yet in July 2007, five units were sold at a median price of $3,369 psf.

    The Straits Times understands that 38 of the 41 units were sold to a handful of private investors, mostly foreigners. Each bought several units and received a slight discount.

    Three units of Hasetrale Holdings' 8 Napier in Napier Road fetched a median price of $3,348 psf last month. In 2007, some flats went at close to $4,000 psf.

    In 2007, Macquarie Global Property Advisors paid $136 million for 19 units at 8 Napier at an average price of $3,550 psf.

    Experts said luxury home prices are about 5 per cent shy of their 2007 peak.

    Colliers International's director of research and advisory, Ms Tay Huey Ying, said that if prices continue to strengthen, even at a moderate pace, developers will be encouraged to gradually offload more units.

    'But this will probably not be on a massive scale because developers are conscious of the strength of the high-end market and are likely to space out their launches evenly and in small volumes,' she added.

    Some investors have also opted to buy landed homes instead, as the limited supply of such property means the sector is more resilient to volatility.

    Experts added that while it is still early days, there could be increasing pressure on developers to lower prices should the high-end segment continue to languish below its peak - both in terms of price and volume.

    Jones Lang LaSalle's head of research for South-east Asia, Dr Chua Yang Liang, said smaller developers with reduced holding power and completed projects on hand would be most affected.

    Larger developers could always lease out unsold units, he added.

    Urban Redevelopment Authority data for private home sales last month showed that 213 homes in the core city centre region were sold, out of 338 launched - the highest number launched for the segment since March.

    This brought total home sales in the city centre this year to 3,741 out of 3,867 units launched as of the end of last month.

    These numbers are in line with last year's 3,825 units for the entire year but short of 2007's 5,454 units sold.

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    Easy to buy DIFFICULT to sell!!!!!!!!!!!!!!!!!

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    Quote Originally Posted by moneyspinner
    Easy to buy DIFFICULT to sell!!!!!!!!!!!!!!!!!
    on the contrary, extremely difficult to buy. Must have lots of moolah before can buy.

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    Quote Originally Posted by hopeful
    on the contrary, extremely difficult to buy. Must have lots of moolah before can buy.
    if got such $$, plenty of choices

    so difficult to sell and easy to buy

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    Lots of people, including the wealthy PRCs and foreigner has the moolah to buy. It's just whether you can convince them these are best buys offering good value and significant upside. So easy to buy, difficult to convince others to buy from u at a even higher price than your entry point with poor rental yields.

    Quote Originally Posted by hopeful
    on the contrary, extremely difficult to buy. Must have lots of moolah before can buy.

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    other than a year like 2007, its difficult to punch prices up so easily for this category. usually, these rich foreigners, if they buy, they will buy with an intention to keep. seriously long term capital appreciation view. its difficult to sell for us who need the liquidity but for those who dun have such needs, why not? this is a good product to help soak up global liquidity.

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    Understand from HK frens that the mainland chinese kind of have"infinite ammo", and wouldn't care less just to leave the flat vacant. they have swamped the market there long time ago and they dun need any mortgage finance at all. HK10mio in cash!!?? how many bags do you need? Guess money is somewhere in south china sea swimming to singapore liaoz...

    One thing people keep talking about is high end market hasn't reached 2007 so there's more possible upside compared to mass market. i am not sure if this is a good logic to support higher prices... law of physics? must reach previous peak? rookie reading sgp property market books, they said high end more cyclical, so price volatility higher than mass market... also not seeing it... confused..

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    Doesn't mean the PRCs have lots of ammo means they are stupid right? Look at the PRC billionaire who would rather forfeit his $500k deposit than complete the Sentosa Cove purchase - he obviously think if is a very bad deal. The problem is, sometimes we hear all these stuff from various forummers about the rich don't care about losing money don't mind to be treated like carrot head and like to throw money away in bad investments because they have too much money to burn and like to leave houses empty and don't care about returns but in reality, they are not like that lah. The rich also like a "challenge" and still like to "win" to boost ego. So they're still prepared to walk away from bad buys.

    PRCs don't care about bad buys? Really? Maybe we underestimated them.

    Quote Originally Posted by art10626
    Understand from HK frens that the mainland chinese kind of have"infinite ammo", and wouldn't care less just to leave the flat vacant. they have swamped the market there long time ago and they dun need any mortgage finance at all. HK10mio in cash!!?? how many bags do you need? Guess money is somewhere in south china sea swimming to singapore liaoz...

    One thing people keep talking about is high end market hasn't reached 2007 so there's more possible upside compared to mass market. i am not sure if this is a good logic to support higher prices... law of physics? must reach previous peak? rookie reading sgp property market books, they said high end more cyclical, so price volatility higher than mass market... also not seeing it... confused..

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    Quote Originally Posted by Wild Falcon
    Doesn't mean the PRCs have lots of ammo means they are stupid right? Look at the PRC billionaire who would rather forfeit his $500k deposit than complete the Sentosa Cove purchase - he obviously think if is a very bad deal. The problem is, sometimes we hear all these stuff from various forummers about the rich don't care about losing money don't mind to be treated like carrot head and like to throw money away in bad investments because they have too much money to burn and like to leave houses empty and don't care about returns but in reality, they are not like that lah. The rich also like a "challenge" and still like to "win" to boost ego. So they're still prepared to walk away from bad buys.

    PRCs don't care about bad buys? Really? Maybe we underestimated them.
    hehe, i always have highest respect for PRC, esp having met so many foreign talents when i was in uni and jc...

    guess it's not so much of stupid or what, i suppose it's more a vote of confidence in singapore. In relative terms, guess Sgp has cheaper/less bubbly properties in singapore compared to HK and mainland cities. so why not, esp when interest rate is low and there is so much liquidity?

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    Quote Originally Posted by Wild Falcon
    Doesn't mean the PRCs have lots of ammo means they are stupid right? Look at the PRC billionaire who would rather forfeit his $500k deposit than complete the Sentosa Cove purchase - he obviously think if is a very bad deal. .......
    Well, we don't know the background story and can only speculate.
    Another possibility is he doesn't have approval to buy landed from LDU?
    Perhaps he is undersirable person?
    Government threaten to pull out RWS once they hear "rumors" RWS intend to partner with Stanley Ho. Of course, RWS no choice but to deny "rumors". So Stanley can only buy durians
    The PRC save more face by saying he don't want to buy rather than be rejected by authorities.
    I mean, Sentosa is supposed to be fast tracked and approval easily granted to foreigners, given the relax conditions, if that PRC still cannot get approval, really lose face.

    Quote Originally Posted by Wild Falcon
    ..... The problem is, sometimes we hear all these stuff from various forummers about the rich don't care about losing money don't mind to be treated like carrot head and like to throw money away in bad investments because they have too much money to burn and like to leave houses empty and don't care about returns but in reality, they are not like that lah. ......
    The rich do care about returns. Much more money is to be made from capital appreciation and not rental yield.
    Most common example :
    How much NETT cash you get from rental HDB flat per year?
    How much NETT cash you get when you sell HDB flat?
    Last edited by hopeful; 23rd December 2010 at 11:17 AM.

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