Property
Published September 12, 2006


Higher-priced homes score biggest volume gains in Q2
Performance driven by upmarket launches, collective sales in prime areas


By KALPANA RASHIWALA


THE luxury housing market continued to shine in the second quarter. The biggest increases in the number of private apartment and condo deals were posted by units in the top two price bands that DTZ Debenham Tie Leung used in its five-tier analysis.


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Getting a fillip: Resale deals in the luxury or $1.4 million and above tier jumped 37 per cent in Q2. This included 107 transactions in Casa Rosita (above)


In the primary or developer market, the trend was driven by high-profile launches of upmarket homes - most notably St Regis Residences.

In the secondary or resale market, strong collective sales activity in the prime districts provided a fillip, DTZ says in its Q2 report based on caveats captured by the URA Realis system.

DTZ said the number of transactions of condos and apartments in the top two bands - units costing $1 million to less than $1.4 million, and units priced at $1.4 million and above - posted respective quarter-on-quarter increases of 39.8 per cent and 53.4 per cent in Q2.

This compares with increases ranging from 11.8 per cent to 27.9 per cent for the three lower price bands.

The top two price bands also chalked up the biggest percentage gains in transaction volumes in Q2 this year compared with the same period last year.

The 850 apartments/condos sold in the luxury or $1.4 million and above band in Q2 this year was 156.8 per cent higher than in Q2 last year - again making it the star performer.

This was followed by a 63.1 per cent year-on-year increase in the number of deals in the $1 million to under $1.4 million band.

Projects with the highest number of transactions in the luxury band in Q2 included St Regis Residences which set record prices (38 caveats), Ritz Residences at Devonshire Rd (32 transactions), Residences @ Evelyn (32 deals) and RiverGate (31 deals).

DTZ also broke down the transaction volumes into primary market and secondary market deals.

In the primary market, 260 caveats were lodged for apartments and condos in the top price band in Q2, up 109.7 per cent from 124 caveats in Q1. This band also posted the biggest year-on-year increase in deals at 32 per cent.

In the secondary market, apartments and condo deals in the second-highest price tier - $1 million to under $1.4 million - posted the biggest quarter-on-quarter increase of 66 per cent.

Resales in the luxury or $1.4 million and above tier increased 37 per cent from 430 deals in Q1 this year to 590 in Q2.

'This was largely due to strong collective sales activity in the prime residential districts. These include 107 transactions in Casa Rosita and 27 deals in Duchess Court which exceeded $1.4 million per unit,' DTZ said.

'Compared with Q2 last year, before collective sales regained momentum, the number of resales in the upper band in Q2 this year increased 160 per cent while that in the luxury band jumped 340 per cent.'

DTZ Debenham Tie Leung executive director Ong Choon Fah reckons the higher-price bands will continue to sparkle in terms of transactions, although much will depend on the profile of launches in coming months. 'If developers release interesting projects in the lower price tiers such as NTUC Choice Homes' and Wing Tai's project near Tanah Merah MRT Station, or CapitaLand's and Lippo's condo next to Redhill MRT Station, then we might see more sales in the lower price bands,' she said.

Although the top two price bands are currently chalking up the biggest percentage gains in transaction volumes, in absolute numbers the volume of transactions in Q2 this year was some way off the levels seen during the property market peak in Q2 1996, when speculation was rife.

For instance, in Q2 1996 there were 1,171 transactions for apartments and condos costing $1.4 million and above. The 850 deals in this price band in Q2 this year is the highest since but is still 27.4 per cent lower than the peak.

The 646 caveats lodged for apartments and condos in the $1 million to under $1.4 million band in Q2 this year was 57 per cent lower than the 1,496 caveats registered in Q2 1996.

Another interesting point is whereas roughly half or even more of the secondary market apartment and condo deals in the top two price bands back in Q2 1996 involved sub-sales - often seen as a proxy of speculative activity - the proportion of sub-sales among resale deals in Q2 this year was much lower, at about 5-odd per cent.

Sub-sales refer to secondary market deals involving projects that have yet to receive a Certificate of Statutory Completion.