Secondary transactions on the rise

An indication of just how market confidence has turned in a span of just two months can be seen in the sale of the penthouse at Arcadia. The 7,503 sq ft unit was first put up for sale by auction at the end of April. The indicative price was $6 million then, but there were no bidders. However, according to a caveat lodged with URA Realis on June 8, the penthouse has been sold for $6.25 million.

Also in District 11 but on Lincoln Road, off Newton Road, there has been a spate of transactions at Park Infinia at Wee Nam, completed by Keppel Land last year. Recent prices, according to caveats lodged from June 5 to 12, indicate that units above the 20th floor were changing hands in the resale market for $1,400 psf and above. The most recent transaction was for a 1,668 sq ft, 26th -floor unit that changed hands for $2.4 million or $1,450 psf. Another floor unit on the 23rd floor, was done at $1,400 psf. Back in March, similar units were going for around $1,200 psf.

In the super-luxury segment, a 37th-floor unit at The Orchard Residences changed hands for $6.4 million or $3,549 psf. It is the first time this year that a unit in the super-luxury-condominium segment has crossed the $3,500-psf mark. The owner had bought the unit in April 2007 for $6.4 million or $3,566 psf when the project was first launched for sale.

The secondary market saw a significant pick up in transaction volume with foreigners’ purchases also on the rise, notes DTZ in a report last Friday. Indonesians and Malaysians accounted for close to half (49%) of the caveats lodged by foreign purchasers (excluding permanent residents) in the months of April and May.

Amid the buying frenzy, average private-resale home prices increased in 2Q, with homes in the prime districts registering the most significant increases compared with those in the suburbs. Average prices had started off being relatively flat in the first half of 2Q2009 but as buying momentum picked up around May, price recovery was seen in all segments.

Freehold condos and apartments in the prime districts of 9, 10 and 11 saw average resale prices rise 11.3% to $1,247 psf, following a 3.7% drop in 1Q2009. Two-bedroom units saw the most significant price increase of 12.8% as the lower quantum price meant that it was the most popular entry level for most people who wanted a property in the prime districts, says Chua Chor Hoon, DTZ’s head of research for Southeast Asia.

Average prices of luxurious nonlanded resale homes also increased 9.6% to $2,060 psf. Average prices of leasehold resale homes outside the prime districts on the other hand, increased by 3.2% to $573 psf in Q2 2009, as prices had fallen less with fewer “specuvestors” in this segment.

Source : The Edge – 6 Jul 2009

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