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Sales boosted by firms launching prime sites they have held for years 

The number of homes sold above the ‘ultra-luxury’ benchmark price of $2,000 per sq ft (psf) this year has already surpassed the combined total for the past 10 years.

There were 183 transactions of these pricey homes in just the first 10 months of this year, according to a check of caveats lodged.

This is 25 per cent higher than the 147 deals done between 1995 and last year.

The trend is led by super-posh projects in which all units are priced above $2,000 psf, a new phenomenon that appeared only this year.

This price level, somewhat of a psychological barrier over the past 10 years, was previously breached only by choice units in selected condominiums rather than whole projects.

One major reason for this new trend could be that developers, sniffing a strong market recovery in the making, are seizing the chance to develop prime sites they have been sitting on for years.

‘The classic example of this is St Regis Residences, which is being built on land that has been around for some time,’ said Mr Nicholas Mak, director of research and consultancy at Knight Frank.

‘City Developments (CDL) knows this is a prime site and has been waiting for the right concept.’

The 999-year leasehold St Regis plot, located along Cuscaden Road near the junction of Tomlinson and Tanglin roads, has been held by CDL for more than 20 years.

The record-breaking development, which breached $3,000 psf in June, accounted for almost 40 per cent of this year’s transactions above $2,000 psf.

In some cases, developers have held back their prime launches because the land was acquired at high prices during the last property boom in the mid-1990s. For the last decade, the weak market has been unable to support the kind of home prices necessary to make these sites profitable, said consultants.

Such plots include the Draycott 8 site, a 99-year leasehold plot picked up by Wing Tai for a record $1,103 psf per plot ratio in June 1997 on the eve of the Asian financial crisis.

The developer started selling units in Draycott 8 only in November last year. Despite having only about 90 years left on the lease, however, three Draycott 8 apartments crossed the $2,000 psf mark this year.

Similarly, CDL’s parent Hong Leong Holdings bought its freehold Tate Residences site along Claymore Road during a mini property recovery in 2000. Market prices dropped soon after that and stayed low until last year.

When Hong Leong finally started selling Tate units in August, demand was so strong during the preview that the project - which made up nearly a fifth of all sales above $2,000 psf this year - was close to being sold out.

‘Projects like Draycott 8 and Tate Residences have not been able to find price support from the market for a long time,’ said Mr Mak.

‘The fact that more homes above $2,000 psf have been sold this year alone than in the last 10 years indicates that this is a once-in-10-years kind of bull run that has come back.’

Mr Ku Swee Yong, director of marketing and business development at Savills Singapore, added that more luxury homes are now being fitted with premium finishes that increase the value of these units.

‘All else being equal, luxury prices might rise 10 per cent to 15 per cent, but in a rising market you throw in branded fittings and that allows you to charge 20 per cent more,’ he said.

Another project that made it to the all-star price bracket this year was the 99-year leasehold The Sail @ Marina Bay. It hit the magical price of $2,009 psf in a sub-sale transaction last month, after already changing hands the previous month for $1,355 psf.

It was first sold for $1,097 psf a year ago, around the time the project was launched at $1,080 psf.

Source : Straits Times - 27 Nov 2006