Redefining the luxury property sector

Location, location and location is the mantra for anyone looking to buy a property. And traditionally, homes in the right neighbourhoods have always maintained their values better.

According to Cushman and Wakefield, median prices of high-end homes have dipped just five percent from the peak of 2008’s prices to between S$3,400 and S$3,500 per square foot. The lower-end markets, however, are still down by some 12 per cent.

Donald Han, vice chairman from Cushman & Wakefield, said: “Developers for luxury market, (the) majority of their sites are of freehold nature. It is not unlike your mass market, which is typically on a 99-year lease.

“You need to sell fast, or else you will end up with a shortening lease term, making it less competitive. A lot of luxury projects, which is located in prime 9, 10 and 11 – tend to be freehold in nature.”

CIMB noted that generally, negative sentiment from the global financial crisis has spilled over, with high-end properties remaining out of favour.

Colliers International noted that properties in the “Core Central Region” as having the smallest quarterly growth of just 0.8 per cent since the market bottomed out in the second quarter of 2009. It has also registered the slowest growth as compared to other properties in the rest of Singapore.

Stepping up the game is SC Global, which is attempting to define a whole new super-luxury property segment. Its latest five-bedroom apartment, The Marq, will be decked throughout in Hermes products, makers of the iconic Birkin handbag which has a starting price of about US$10,000.

When ready by March 2012, the 6,200 square foot unit at The Marq will feature furniture, fabrics, rugs, carpets, wallpaper, and made-to-measure leather upholstered Hermes items.

While the apartment is not for immediate sale, SC Global said it will consider catering to demand.

Simon Cheong, Chairman and CEO of SC Global, said: “Going forward, we would be happy if our customers have similar Hermes furnishings… we would be happy to provide that. It says a lot when a global brand like Hermes – they have many places to pick (from) but they picked Singapore. And within Singapore they picked SC Global to showcase their products.”

The Marq on Paterson Hill currently holds the record for the priciest high-rise home in Singapore. To join the super luxury club, you will need to pay around S$6,000 per square foot for your home.

If rents are anything to go by, the super-luxury segment may have to offer more than Hermes though.

According to Jones Lang LaSalle, rentals in the prime districts have started to fall for the first time since the first quarter of 2008. The fall in rents in the luxury segment is the steepest at about two per cent (quarter-on-quarter in Q3 2011) to S$5.13 per square foot per month.

Source : Channel NewsAsia – 4 Oct 2011

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