Luxury condos find new price level below $2,000 psf

Source : The Edge - 27 Apr 2009

There have been few transactions at the luxury end of the condominium market this year. But the few sales in the secondary market that have surfaced in the most coveted prime residential address in Singapore, Ardmore Park and Claymore Road, according to the caveats lodged from March 24 to April 7, show that some owners are prepared to let go of their freehold luxury condos at prices below $2,000 psf.

At Ardmore II, soft-launched in September 2006, where more than half the units were reportedly sold at prices averaging $2,300 psf, a recent sub-sale for a 2,024 sq ft apartment was done at close to $3.24 million, or $1,600 psf, according to a caveat lodged on April 1. This is a new low in terms of price per square foot in the 118-unit development where all typical units are 2,024 sq ft. The development, located within the prestigious Ardmore Park area, is expected to be completed in the coming months. According to the URA Realis database, the owner of the apartment had purchased it in February 2007 from the developer in a new sale for $4.75 million, or $2,407 psf.

At The Tate Residences, an 85-unit luxury development on Claymore Road, most of the units were sold in 2H2006 even without an official launch, with average prices hit- ting the $2,200 psf to $2,250 psf price band. The most recent transaction at the 36-storey twin-tower project was for a 3,208 sq ft apartment that changed hands in a sub-sale at $5.93 million or $1,850 psf, with a caveat lodged on March 24.

This is the first transaction at Tate Residences this year. The last transaction was in July 2008 when a 1,894 sq ft unit was sold in a sub-salefor $4.83 million or $2,549 psf.

The owner, who sold the apartment at Tate Residences at $1,850 psf purchased it in September 2006 for $6.627 million, or $2,066 psf, according to a caveat lodged with URA Realis. At $1,850 psf, the price is back to the levels seen in August to September 2006, when some of the units were sold for $1,760 psf to $1,993 psf.

However, most of the apartments at Tate Residences were sold at more than $2,000 psf. At the peak in August 2007, a 3,229 sq ft apartment was sold for $11.3 million ($3,500 psf), the highest price psf achieved in the development. The project is expected to be completed this year.

Interestingly, Ardmore Park, the luxury condominium that epitomised the boom in 1995/96, is also still very much the yardstick that most property consultants use today togauge the performance of the luxury condo market. Completed in 2001, all the typical apartments are regular-shaped, four-bedroom apartments sized at 2,885 sq ft, and six penthouses sized at 8,740 sq ft. The most recent transaction (and first recorded this year) was that of a 2,885 sq ft apartment in one of the three 30-storey towers that changed hands at $5.7 million, or $1,976 psf, on March 26. According to caveats lodged with URA Realis, the last time this apartment changed hands in the resale market was in May 2006 for $5.52 million ($1,914 psf). The original owner had purchased the property from the developer when it was first launched in July 1996 for $5.48 million ($1,900 psf).

At the most recent peak from July 2007 to April 2008, there were eight apartments at Ardmore Park that changed hands at prices of $3,009 psf to $3,500 psf. However, over the years, prices at Ardmore Park have been holding up well in the $1,500 psf to $1,900 psf range, with quite a few transactions above $2,000 psf even during the last peak over a decade ago when the project was first launched for sale. And in the previous recession, there were several resale transactions from September 2001 to 2003 that were done at $1,200 psf to $1,500 psf. Will luxury condos revisit those levels again? Only time will tell.