After a week of frantic buying at mind-boggling prices, demand for the red-hot property Marina Bay Residences has finally cooled down, with agents attributing the trend to unrealistic prices.
According to sources, at least two 4-room units in the new downtown condominium were sold in the sub-sale market yesterday at $2,700 psf. The average price achieved in the preview sale last week was $1,850 psf.
Agents told Today that the sub-sale market yesterday was active with enquiries from local and overseas parties but relatively quiet on the transaction side as both sellers and buyers wait for the best deals.
The prime 99-year leasehold condominium located in the Marina Bay integrated resorts precinct made history last week when all 428 units were snapped up within three days after the launch of its preview sale on Tuesday.
Prices hit a record-high of $3,500 psf or $28 million for an uber penthouse, said to be bought by a group linked to Macau casino tycoon Stanley Ho. The national record for 999-year units, which are typically more expensive, is $3,030 psf, held by St Regis Residences. By Thursday, Bay units started emerging in the sub-sale market, triggering market talk that there will be intense speculation.
Over the weekend, more such units have surfaced, with sellers quoting prices up to 50 per cent higher than the amount they paid, said Mr James Lee, director of James Lee Realty. Buyers are said to be aiming for profits ranging from $150,000 to over $2 million per unit.
In one instance, one owner quoted $4,000 psf for a 4,400-sq-ft penthouse with a panoramic view of the bay and the sea. This works out to be about $17.6 million for the unit. According to market watchers, these penthouses were bought at around $3,200 psf to $3,400 psf last week.
Confident that he can get better offers, the owner turned down an extremely attractive offer of $3,800 psf and decided to wait, said an agent.
“There is definitely demand, but the price is not right. The sellers are asking for about 30 to 50 per cent higher than what they paid, whereas buyers are willing to pay a premium of about 10 per cent to 20 per cent,” said Mr Lee.
For now, it’s a waiting game to see who blinks first. Analysts foresee that speculators with less holding power may be forced to cut their prices. “You can place the owners into two groups — the speculators who just want to let go quickly at a profit and the ones with deep pockets, who can afford to hold until nearer to completion date, when the value may go up even more,” said Mr Nicholas Mak, director of research and consultancy, Knight Frank.
“If buyers refuse to bite, the ‘flippers’ may let go at a slightly lower price, because they’ll still make profits anyway,” said an agent.
Besides, prices might dip slightly following the launches of other properties within the central business district such as One Shenton, Mr Mak pointed out. It’s a long wait till harvest time as the integrated resort is due to be completed only in 2009.
“No doubt, it’s very prime. Perhaps five years down the road, prices will be supported by fundamentals … But the question is whether the price is realistic today. Do you have the deep pockets to hold till then?” said Mr Colin Tan, research and consultancy director, Chesterton International.
Source: TODAY, 20 December 2006