People are still shopping for luxury homes in the prime districts even after the latest round of property cooling measures implemented on July 6. They are, however, going for established developers whose names are synonymous with luxury, for instance, SC Global Developments and Wheelock Properties.
The latter’s Scotts Square is one such development that has benefited from buying interest from this group. A 635 sq ft, one-bedroom unit on the 34th floor was sold for $2.36 million ($3,716 psf), according to a July 12 caveat. This is comparable to the psf prices of $3,003- to-$3,835 fetched by the previous 10 units transacted at Scotts Square from last October to April this year, based on caveats with URA Realis.
“Some of the buyers who purchased units at Scotts Square earlier this year and in 2017 were betting that prices in the luxury segment were poised to rise,” observes a veteran property agent in the luxury market, who declined to be named. “With the latest property cooling measures, they will be holding on to these units for some time.” Most of them are likely to be investors in the $2 million-to-$5 million range, he adds.
Completed in 2011, the freehold Scotts Square has 338 units. It is 89% (301 units) sold, according to Wheelock Properties’ 1Q2018 results ended March 31. Of the remaining unsold inventory, 81% of the 26 units earmarked for lease are tenanted.
Another luxury development that has been on the radar since 2H2017 and where sales have ramped up dramatically since March is Hilltops on Cairnhill Circle. The 241-unit freehold project by SC Global Developments was completed in 2011.
The most recent transaction at Hilltops was that of a 1,550 sq ft, three-bedroom unit on the ninth floor that went for $4.65 million ($3,000 psf), according to a caveat filed on July 16. Since March, 17 units at Hilltops have fetched prices ranging from $2,776 psf for a 1,249 sq ft, two-bedroom unit, to $3,696 psf for a 2,379 sq ft, four-bedder.
Meanwhile, YTL Singapore’s 3 Orchard By-The-Park on Orchard Boulevard, which was completed last year, recently achieved its first sale. A 1,152 sq ft, two-bedroom unit on the fourth level fetched $4.25 million ($3,686 psf), according to a caveat lodged on July 17. YTL held a preview of the 77-unit luxury development at end-June, setting the prices from $3,490 psf.
The property cooling measures are likely to weigh more heavily on foreign buyers and the wealthy, says Tay Kah Poh, Knight Frank executive director and head of consultancy. “This is because they have to fork out higher cash amounts and pay heftier stamp duties,” he explains.
Foreigners are hit by a 20% additional buyer’s stamp duty. Singaporeans buying their third and subsequent properties will have to pay a 15% ABSD, compared with 12% if it is only a second property. Corporate entities buying residential property will be charged a 25% ABSD, and an additional non-remitable 5% applies if they are housing developers.
Hence, the luxury market in the prime districts of 9 and 10 is expected to remain relatively subdued.