Savills Singapore has reported that the prices of non-landed luxury homes it monitored remained steady in the first quarter of the year.
Savills’ data showed that the average price of non-landed luxury private homes remained steady at S$2,269 psf in the first quarter, rising marginally by 0.5 percent quarter-on-quarter from S$2,258 psf in the last quarter of 2010.
The average price of “super luxury” residences also increased marginally by one percent quarter-on-quarter to S$3,417 psf in the first quarter, from S$3,383 psf in the previous quarter.
Thus, the price gap between the Q4 2007 peak and current prices is gradually narrowing, with high-end and super luxury residential prices now only 5.9 percent and 7.2 percent under their peak levels.
Savills anticipates sustained interest in luxury homes in the longer term, as the land supply within this market sector is limited.
“Well-located luxury homes with good product offerings may continue to command premium prices,” Savills said in a report.
“More overseas investors may also divert their investments here, as the strong Singapore dollar can help them hedge against any fluctuations in the global exchange rate.”
In the rental market, the average monthly rent of luxury non-landed residential properties monitored by Savills continued to increase for five consecutive quarters to S$5.43 psf in Q1 2011. However, the growth moderated to just 0.7 percent quarter-on-quarter.
Located in prime districts, most projects completed in the first quarter will exert some short-term pressure on prime rents going forward. But rents are anticipated to stay firm for super luxury homes and good class bungalows as supply is limited.
“Although rents for some high-end private homes may face short-term pressure from the new completions, the limited supply of land for this market segment in the long term could still see rents of good class bungalows and super luxury homes holding firm in the next few quarters,” Savills Singapore said.
Source : PropertyGuru – 26 May 2011