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Bullish prices for higher-end units hark back to 1996 property boom

IN A sign that the high-end property market may be fast edging back to the boom-time price levels of 1996, six units at Cairnhill Crest have been sold for more than $2,000 per square foot (psf).

These prices are reminiscent of the heyday of the property boom, when luxury freehold projects such as Ardmore Parkcommanded record prices of above $2,000 psf.

Market watchers said the Cairnhill Crest figures were unexpected because even though the luxury market is heating up, such bullish prices tend to be seen only at ultra-posh niche developments.

The project, developed by Hong Kong billionaire Li Ka Shing’s Cheung Kong Holdings, was launched last October and is regarded by some property experts as being as a notch below that in the luxury stakes.

SC Global’s The Ladyhill, for instance, sold two units for more than $2,000 psf in July and October last year. The 55-unit development in the exclusive Nassim Hill area has won a slew of architectural awards.

Another prestigious SC Global project, the 46-unit The Boulevard Residence at Cuscaden Walk, sold a 2,034 sq ft condominum in October at a record price of $2,200 psf, a level not seen since the late 1990s.

In contrast, Cairnhill Crest, with 248 units, is a ‘different category of product’, said Knight Frank’s director of research and consultancy, Mr Nicholas Mak.

‘It is surprising that Cairnhill Crest can reach the same prices as Ardmore Park, which is the benchmark of luxury condos.

‘If that area can sell at above $2,000 psf, then other areas would go even higher than that, which means we could see a 20 to 25 per cent rise in luxury home prices this quarter.’

Cheung Kong said yesterday that it has so far sold 180 units at an average price of $1,705 psf or $2.6 million per unit.

Of the six units sold at over $2,000 psf, two were four-bedroom units averaging 2,013 sq ft, while the rest were three-bedroom units at 1,733 sq ft, Cheung Kong said. The most expensive unit sold was a 3,057 sq ft penthouse, which went for $5.5 million.

The developer plans to release the remaining units in three batches over the next six months, with prices rising up to $2,300 psf for the remaining unsold penthouse, said Cheung Kong’s deputy chief manager of sales, Mr Francis Wong.

‘We actually planned a second launch but now we don’t need that because our sales are already 40 per cent above our initial target,’ he added.

The first batch of 20 new units, due to come on the market in mid-March, will be priced between $1,850 and $1,870 psf.

But the average price of the final batch of units, which will be released in the third quarter, should hit $2,000 psf, Mr Wong said.

That batch will also include the last of the condominum’s 10 penthouses, which Cheung Kong said it deliberately held back from sale in anticipation of a further increase in luxury home prices. The other nine penthouses, averaging 2,500 sq ft each, have been sold at an average price of $1,968 psf and were all snapped up by foreigners.

In fact, 72 per cent of the units at Cairnhill Crest were sold to foreigners from places such as Indonesia, Hong Kong, China and Australia, he said.

He said one unnamed Indian buyer from Mumbai splurged on four units over three months, paying $14.5 million in total. He kept two units for his own use and is planning to lease out the other two.

And although more than 10 buyers bought at least two units, Mr Wong said there is no evidence of speculative activity.

Source : Straits Times - 24 Feb 2006