Singapore's property market shows superficial recovery signs, but problems run deeper - AsiaOne

Monday, Oct 24, 2016

Leslie Shaffer

CNBC

Don't believe the hype about a Singapore property pick-up, Nomura said, as it addressed some "half-truths" about one of Asia's long-time real estate hotspots.

That came as buyers and sellers looked cues for whether the city-state's property market had finally neared the bottom.

Singapore's private residential property prices dropped 1.5 per cent on-quarter in the third quarter, according to government data, marking 12 straight quarters of declines and the largest quarterly drop since 2009, during the global financial crisis.

But the first "half-truth" about the market's next step was that the city-state's private home sales had seen strong gains, Nomura said in a note dated Thursday. In September, sales of new private residential properties picked up, rising 49.3 per cent on-year and nearly 9 per cent on month to 509 units.

But the bank noted that on a rolling 12-month average, developers' private home sales had hovered around 600 units a month since the end of 2014. It didn't expect that some large sales figures for October, such as a new development called The Alps Residences, and that Forest Woods had sold a combined 607 units, would matter much to the full picture.

But in a more encouraging sign, secondary market transactions have picked up, averaging 690 private homes each month for 2016's first eight months, up from 560 in the same period last year and 480 in 2014, Nomura said.



Secondly, Nomura said signs of a demand pickup for prime luxury properties were overstated.

While 600 new private homes sold in the core central region in the first nine months of this year, up from 430 in all of 2015, more than a third were from just one development, and this year's average of 67 units a month was still historically low, it said.

Additionally, it said the luxury segment, or properties priced over 5 million Singapore dollars ($3.59 million), were averaging a relatively low 114 units a quarter.

The third half-truth was that unsold inventory was low, especially in the suburbs, Nomura said. While unsold inventory overall and in the suburbs had fallen to 35 and 25 months respectively, down from 2014's peak of 46 and 35 months, it was still high compared with averages of 30 and 22 months from 2009-2015, the bank said.

"We believe the unsold inventory should be measured against the prevailing demand, rather than in isolation," it said.

Another myth was that the vacancy rate for private residential property had finally reached the peak, Nomura said.

The 30,000 new private homes completed from 2015 through the first half of this year pushed the vacancy rate above 10 per cent in the second quarter, its highest since 2005, Nomura noted. But it noted that another 30,000 units would be headed to market in the second half of this year and through next year. That worked out to around 20,000 units a year, it said.

"To put things in context, the pace of private housing completions between 2000 and 2013 was about 9,200 units a year," it noted.

Finally, Nomura said that it was a half-truth to expect that the prime luxury segment had reached a pricing bottom. It noted that unsold inventory in the core central region was equivalent to more than 100 months of demand, with 76 per cent more completions slated for the coming 18 months than in the previous 18 months.

"We are concerned that there could be more downside to rents and capital values in the prime luxury segment, notwithstanding the fact that rents and capital values have already corrected 50 per cent and 27.6 per cent respectively from their first quarter of 2008 peaks," it said.

Source: AsiaOne

Curbing 'lottery gains' of flats may backfire: Experts - AsiaOne

Sunday, Oct 16, 2016

Yeo Sam Jo

The Straits Times

Imposing tighter resale conditions on public flats in prime areas may not deter buyers from cashing in, and may even lead to other problems, said property experts.

They were responding to National Development Minister Lawrence Wong, who said in a Straits Times report last week that the Government is considering measures to mitigate the "lottery effect" of such flats, which tend to reap hefty profits when they hit the resale market.

Possible measures include lengthening the current minimum occupation period (MOP) of five years, shortening the usual 99-year lease and imposing a higher resale levy.



But these may not work, as flats in the city will still draw demand and high capital gains because of their coveted location, said observers.

R'ST Research director Ong Kah Seng said: "Buyers of flats in prime areas generally emphasise the location and pride of having a flat in central locality, such that they will usually do what it takes to have the chance to own such a flat."

SLP International Property Consultants research head Nicholas Mak noted that a shorter lease and longer MOP will not curb the lottery mindset among buyers.

He said: "The owners will still sell the flat after the MOP if they don't intend on staying there. Even if the lease is shorter, the next buyer may also have a short-term mentality."

Mr Mak said the Selective En bloc Redevelopment Scheme (Sers) might defeat the purpose of a shorter lease.

Under Sers, old HDB estates are demolished and replacement flats are offered to residents. As a result, even if the lease is shorter, flats will still be in demand if people anticipate that they will receive replacements before the lease is up.

As for raising the resale levy, which ranges from $15,000 for a two-room unit to $50,000 for an executive flat, Mr Ong said this might lead to higher prices if sellers raise their asking price to offset the levy.

OrangeTee research and consultancy manager Wong Xian Yang said that while a longer MOP might stop speculative demand, this might put owners who genuinely need to sell the flat urgently in a difficult position.

Instead, he suggested controlling the original launch prices. "Even if a flat is sold for $1 million, if they buy it at $800,000, the capital appreciation is not that much," he said.

Mr Mak suggested taxing away any "lottery" gains. But implementing it in a fair way might be hard.

"How do you determine what is a super normal profit? And where do you execute the tax?" he asked, noting that non-city locations such as Bishan and Clementi also command high resale prices.



Chief executive of International Property Advisor Ku Swee Yong feels that public housing subsidised by taxpayers should not be built on expensive, prime land. "We can begin by rezoning all HDB sites in the core central region (CCR) as private residential sites," he said, citing the HDB blocks in Tanjong Pagar Plaza.

He added: "The higher land value for residential sites in the CCR will return more cash into our national reserves when private developers pay for these sites.

"Such a move will also reduce the burden on taxpayers subsidising 'lottery flats' and creating millionaires of subsidised home owners."

Handsome profits
Many public flats in prime areas have reaped handsome profits.

The Pinnacle@Duxton in Cantonment Road, for instance, has seen 186 resale transactions so far, said SRX Property. Most units there were allowed on the market at the end of 2014. Twenty of these flats went for $1 million or higher, including a five-room flat sold last month for $1.12 million.

National Development Minister Lawrence Wong had noted that such windfall gains are unfair as these flats are subsidised and obtained through a ballot.

This concern will crop up again as the Government looks to introduce HDB flats in other choice locations like the Greater Southern Waterfront, to be built on land freed up when ports in Pasir Panjang and Tanjong Pagar move to Tuas by 2027.




This article was first published on Oct 16, 2016.

Source: AsiaOne

How are property prices affected by new MRT stations - AsiaOne

Tuesday, Oct 11, 2016

Lee Nai Jia

The Business Times

AN old adage in real estate investment - "location, location, location" - suggests that real estate investors should focus more on the location than the physical attributes, tenure and stage of the market cycle.

Given that each property is a unique and non-movable asset, prices at choice locations will be more resilient in an uncertain economy and will appreciate more than other assets when the economy picks up.

In the residential market context, the "location" is usually defined as the distance of the property to key employment centres, leisure amenities and educational institutes. However, the key determinant of the value of a residential property is actually its distance to key transportation nodes.

The relative value of a location varies over time, as the introduction of new transport infrastructure in the neighbourhood improves accessibility to activity centres.

This is especially so in Singapore, where the Land Transport Authority has outlined plans to double the rail network from 178 km to approximately 360 km by 2030 with the addition of the Thomson Line, Eastern Region Line, the Tuas West Extension of the East-West Line and an extension to the North-South Line.



Based on a study of properties near the Circle Line, three researchers, Diao Mi, Delon Leonard and Associate Professor Sing Tien Foo from the Department of Real Estate, School of Design and Environment at the National University of Singapore, discovered that the opening of a new urban rail line increases the value of non-landed private homes located within 600 metres of the MRT stations by 6.3 per cent.

The trio further showed that properties near interchange stations have an additional 4 per cent premium.

Interestingly, the study also indicated that the announcement of the location of new stations has an insignificant impact on the values of properties close to the proposed stations.

Based on our anecdotal market observations, this is not surprising as buyers are not keen to move in during the construction phase of proposed MRT stations due to the noise, pollution and inconvenience generated.

With the upcoming MRT completions, some private developments are expected to see a price appreciation amid a weaker market. However, the impact may vary depending on the connectivity of the area, existing price levels of other developments within the vicinity and the type of properties in the area.

For instance, we expect landed homes that are very close to the proposed MRT stations to see a smaller price appreciation as their sense of privacy and exclusivity could be diminished. Based on research from Edmund Tie & Company, we have compiled a list of potential developments that may benefit from the upcoming completions.

Downtown Line Stage 3

Photo: LTA
Most of the stations on the upcoming Downtown Line Stage 3 are surrounded by HDB estates, commercial developments or industrial developments, with the exception of Upper Changi Station and Bedok Reservoir Station.

The proposed Upper Changi Station is located near the existing campus of the Singapore University of Technology and Design and One World International School, and there are many private residential developments and landed properties nearby.

Based on proximity, the non-landed developments that are likely to gain most from the completion of the Downtown Line Stage 3 include Changi Court, Changi Green, Cascadale and Tropicana.

Currently, residents have to walk at least 11 minutes to Expo MRT station. The completion of the Downtown Line will reduce their travelling time to the nearest MRT station by at least six minutes.

Based on resale transactions in 2016 to date, the older units cost about S$1.6 million. Notwithstanding, the volume is thin, as sellers are trying to leverage the upcoming MRT station by asking for higher prices.

Unlike properties near the proposed Upper Changi Station, developments close to the Bedok Reservoir station are not within walking distance to any MRT station. Hence, benefits to the private developments will be greater.

The effect on price appreciation may vary across developments, as the newer developments, such as Waterfront Gold, have taken into account "the MRT effect" and was priced higher when it was launched.

We also anticipate the owners of smaller units in these developments to benefit more from the completion of the Downtown Line extension, as their units become more attractive for rental to foreign professionals working in the area.


Thomson-East Coast MRT Line
The Thomson-East Coast Line, which will open in five stages from 2019 to 2024, is anticipated to add value to a number of private residential properties located near the proposed new MRT stops.

Most of these private residential properties are not within walking distance to any existing MRT station and residents have to rely on public buses or private cars as their main mode of transportation.


Unlike the Downtown Line, it is less likely that premiums generated from the new MRT line has been fully factored into the current market prices of the impacted properties, given its later projected completion dates.

Benefits to landed homes in Ang Mo Kio, Bishan and Yio Chu Kang
The completion of the Thomson Line is expected to benefit owners of landed homes in the Yio Chu Kang, Ang Mo Kio and Bishan areas.

The completion of the line will allow them convenient access to the town centres for shopping and leisure amenities and reduce their reliance on cars as their primary mode of transportation.

The terraces near the upcoming stations were transacted at between S$2.2 million and S$3.5 million in 2016, depending on the gross floor areas of the sites and their condition.

Prices for these landed homes have been fairly stable since 2013. These homes will attract buyers who seek landed properties for investment and also homebuyers who are upgrading from their private apartments and still need the accessibility offered by MRT stations.

While there are no local studies on how MRT stations affect the prices of landed homes, it is anticipated that the price appreciation is expected to be roughly the same as that for private non-landed homes.



River Valley: Rental demand to rise


River Valley has been a popular place for expatriates given its vibrant night life, trendy bistros and its proximity to the main shopping area at Orchard/Scotts Road. It is also close to established schools such as River Valley Primary School and is a short drive away from the Central Business District.

With the upcoming station at Great World City, several private developments in the area are expected to see more demand.

Given that the quantum for the larger units in the area is high, their price appreciation is likely to be moderated due to a tempering of demand by the cooling measures. Notwithstanding, the upcoming MRT station will help to ease the pressures on the leasing market for the properties there.

Renewed interest from Tanjong Rhu to Siglap
Interest in the private developments along the East Coast line from Tanjong Rhu to Siglap Centre has always been keen due to their proximity to East Coast Park and relatively short drive to the CBD.

The area is also fairly accessible to the airport via the East Coast Parkway, making these districts a good stopover for overseas visitors from Changi Airport.

Moreover, the developments here tend to attract strong rental demand due to the character of the place. For example, the Katong area has a unique identity linked to its Peranakan roots and is bustling with a mix of modern and traditional eateries.

However, most residents in the area rely on private transport or public buses due to the absence of MRT stations nearby. With the upcoming Thomson-East Coast line, accessibility will be boosted and we anticipate that its appeal to expatriates and the international community will increase.

The smaller freehold apartments are inclined to see more sales and will benefit most from the new MRT stations.
In terms of pricing, the difference between freehold and leasehold apartments with areas of less than 50 square metres is marginal at about 5 per cent. Additionally, buyers are more likely to afford such units given the lower quantum.

With the upcoming stations, the price and rent gradients of homes from the CBD to the outskirts are likely to flatten. Homebuyers and renters will have more options, and can better optimise their housing needs with their limited budget.

While the premium of being near a station is likely to be moderated with more lines completing, the number of stops from the MRT station to the CBD and the number of train transfers between lines become more critical in preserving the premium.

Additionally, the new MRT stations may increase the value of nearby properties, but their impact will be limited if there is a lack of other amenities or distinctiveness in the character of the area.

In other words, developments in River Valley and those in districts 15 (Joo Chiat, Marine Parade, Katong, Tanjong Rhu) and 16 (Bedok, Upper East Coast Road, Siglap, Bayshore) are likely to benefit the most as buyers and renters are already drawn to these areas, and have one less trade-off to consider.

The writer is director, head (S-EA) research at Edmund Tie & Company.

This article was first published on October 6, 2016. 

Source: AsiaOne

Prime Sentosa Cove bungalow sold for just S$1,108 psf - AsiaOne

Sunday, Oct 09, 2016

Kalpana Rashiwala

The Business Times

IN the same week that a bungalow on Sentosa Cove was sold at a near-record price, another sale has been concluded in the waterfront housing district at what some may consider a bargain basement price for an ultra-prime locale.

BT has learnt that a seafronting bungalow along Cove Drive with views of the Southern Islands has been sold for just S$1,108 per square foot on land area.

This comes barely a week after news of a bungalow along Ocean Drive being transacted at a near-record price of S$2,923 psf.

The price for the Cove Drive property has baffled property market watchers, given its posh location in the southern precinct.

The bungalow is being sold by an Indian citizen to a Singaporean of Indian descent in her early 20s whose father was previously a senior UBS executive.



Market observers note that the house appears to have been vacant since it was built about five years ago. The absolute price is S$9 million and the property is on 8,126 square feet of land with 99-year leasehold tenure starting Jan 30, 2007.

It spans two storeys and a basement. There is a pool on the ground level facing the Southern Islands. "The house appears to be properly finished but it's just that the lighting and other fittings, furnishings are missing," said a source. "Assuming one were to spend a further S$2 million fitting it out, the total cost of S$11 million would work out to S$1,354 psf - which still seems low."

Agreeing, Singapore Christie's International Real Estate managing director Samuel Eyo said: "The market rate for a fully furnished house in liveable condition in a prime location like this would be at least S$2,500 psf on land."

This could be a one-off transaction, just as the Ocean Drive deal could also be seen as a one-off and not reflective of a broad-based recovery of bungalow prices on Sentosa Cove to peak levels, he added.



The Ocean Drive bungalow, which changed hands for S$28 million, is on 9,580 sq ft of land with 99-year-leasehold tenure starting June 2005. The seller is said to have invested a few million dollars fitting out the interior.

That property fronts the sea but also has views of the container terminals and Singapore's Central Business District. It is located in the northern precinct of Sentosa Cove, which was the first phase of the development of the waterfront residential district.

The Cove Drive bungalow is located in the southern precinct, where residential land parcels were sold later.

The bungalow location, with its Southern Islands facing, is considered superior to the one along Ocean Drive and is in a quieter area. Market watchers note that the Sentosa Cove bungalow market is currently illiquid, so it may be difficult to draw conclusions from each transaction. "Each deal may have very specific factors at play, not just in terms of property attributes but the buyer's and seller's intentions," said Mr Eyo.




This article was first published on October 8, 2016. 

Source: AsiaOne

Will million-dollar HDB flats be the new norm? - AsiaOne

Saturday, Oct 08, 2016

Ismail Gafoor

The Business Times

Today, every HDB flat has an open market value which its owner can realise after staying in the flat for a minimum period. The values of HDB flats today reflect Singapore's growth and prosperity since the 1970s.

However, in 2006, when the rapid population growth far exceeded supply and resale prices soared, both build-to-order (BTO) and resale prices raised the ire of Singaporeans, especially as resale prices surged more than 94 per cent in just a few years.

People have been alarmed at the dramatic rise in public housing costs - particularly with reports of million-dollar resale flats surfacing. This has caused many to wonder if HDB flats will remain affordable for future generations.

Here are some examples of million-dollar resale flats in Singapore:
The first HDB flat to hit this dizzying price level was an executive apartment at Block 149 Mei Ling Street in Queenstown. The unit was sold for S$1 million in 2012 with a cash-over-valuation (COV) of S$195,000. On a high floor, the 1,615 square foot (sq ft) unit offers unblocked views of Queenstown stadium and is close to supermarkets and food centres.

A 1,615-sq-ft executive maisonette near Bishan MRT station was sold for S$1.05 million at the end of 2013, translating to a COV of S$250,000. The unit is on the 20th floor of Block 190 at Bishan Street 13.

In Oct 2014, a similar-sized executive maisonette also in Bishan Street 13 changed hands for nearly S$1.09 million. The 27-year-old two-storey unit is located at Block 194 near a 24-hour food centre and Junction 8 shopping centre.

More recently in March this year, a top-floor unit at City View @ Boon Keng, a Design, Build and Sell Scheme (DBSS) development, was sold for S$1.028 million. On the 40th floor, the unit has higher ceilings in the balcony and living room, compared with units on the lower floors, and offers an unblocked vantage view and a spacious layout of 1,281 sq ft.



Market forces in play
It is good to know that compared to BTO flats, HDB resale prices are primarily determined by market forces. The government cannot simply manipulate prices as there would be many repercussions. On the one hand, artificially lowering prices would benefit those who cannot afford a home; on the other, it will cause much displeasure among those who have recently bought a resale flat, or even the majority of HDB flat owners who are sitting on a tidy paper profit.

While the government has limited maneuverability in implementing policies to affect prices directly, several cooling measures were introduced to indirectly cool HDB resale prices. This includes the the Mortgage Servicing Ratio, Total Debt Servicing Ratio and the removal of COVs.

Meanwhile, with the evolution of the resale market, buyers' tastes have changed and flats are now also valued differently - depending on factors such as location, view, and design. Now, buyers are more willing to pay more for a top-floor flat commanding the best view, compared to a lower-floor unit facing the bin centre.

Appeal of million-dollar flats Buyers will always be willing to fork out huge amounts for homes located in "hot areas" such as Bishan, Toa Payoh, Queenstown and Clementi. The fact that fewer new flats are being launched in these mature estates definitely also helps boost their appeal.

The Bishan maisonettes, for example, are a type of flats that was constructed in the 1980s, and construction of these flat types has stopped with the launch of executive condominiums (ECs) in 1995. Maisonettes are different from most regular flats, having a large floor space of around 150 square metres. Such homes usually command a premium. Pinnacle@Duxton - a famous producer of million-dollar flats - is also not a typical HDB development either. Its location in Tanjong Pagar is not something most flats are blessed with.

One possible way to explain the million-dollar HDB flat trend could be that condo and EC sizes have shrunk. Some extended families need the larger space to have a more comfortable living environment and so they have had no choice but to purchase a HDB unit with the right size, even if they can buy a similar-priced condo with a smaller area. Such million-dollar flats are not many, and even if they are transacted, they do not fully represent the market as they form just a minority of HDB resale deals.

There is no reason to be alarmed because it is uncommon for people to pay such high prices for a HDB resale flat. And with the numerous cooling measures in place, it is even rarer that a buyer can afford to pay such a large quantum for a HDB flat.



Differing value of flats
Today, we have built a unique public housing system that is based on home ownership. It offers Singaporeans not only shelter but also a store of value.

However, Singaporeans have to understand that there are always people who are prepared to pay more for a flat's inherent value - good location, high floor, proximity to good schools, and so on. And these flats usually command a premium that buyers are always willing to pay more for.

But flats with such qualities are few - and we should stop seeing these flats as an indicator of our public housing prices skyrocketing. They are not in fact "warning signs" of uncontrolled housing prices.

The writer is PropNex Realty CEO.



This article was first published on October 6, 2016. 

Source: AsiaOne

Raintree Gardens sold for $334.2m - AsiaOne

Friday, Oct 07, 2016

My Paper

Property developer UOL Group said associate company UVD (Projects) has bought the Raintree Gardens residential development at Potong Pasir Avenue 1 for $334.2 million after an en-bloc tender.

The site had been launched for collective sale in September.

Raintree Gardens, a former HUDC estate, was built in the late 1980s.

The purchase will be funded by bank borrowings and internal resources, UOL said.

"The acquisition is in the ordinary course of the group's business, and would enable the group to replenish its landbank for residential development in Singapore."

UVD (Projects) is a joint venture by UOL subsidiary UOL Venture Investments and Singland Homes, a subsidiary of developer UIC.



Source: AsiaOne

Sentosa Cove bungalow sold for $28 million, fetches near-record price of $2,923 psf - AsiaOne

Wednesday, Oct 05, 2016

Kalpana Rashiwala

The Business Times

Singapore - A bungalow in a prime seafront location on Sentosa Cove has been sold for a near-record price of S$2,923 per square foot (psf) on land area.

The absolute price works out to S$28 million for the property, which is located along Ocean Drive and consists of two storeys and a basement. It sits on 9,580 square feet of land with 99-year-leasehold tenure starting June 2005 - reflecting a balance lease tenure of 88 years.

This is only the second caveat to be lodged for a bungalow purchase in Sentosa Cove this year. The property has four bedrooms, a meeting room, a swimming pool (with views of the sea, CBD and container terminals), a koi pond and a roof terrace.

The property is being sold by Hii Yii Ann, a Malaysian citizen and Brisbane businessman who has been in the news in Australia on tax evasion charges according to Australian media reports. Mr Hii, who is in his 50s, made his fortune in the timber business in Papua New Guinea.

BT understands that the buyer is a Chinese citizen and Singapore permanent resident (PR) in his late 30s, involved in an IT/telecom business.



Gillian Wu of PropNex represented the buyer, but declined to comment on his identity or the business sector he is involved with.

"This ultra high net worth client had been looking for a suitable residential property in Singapore for some time. He and his family viewed several high-end apartments in the prime districts but nothing caught his eye until he saw this bungalow," said Ms Wu. A big part of the decision to buy the bungalow had to do with its interior design; it has been renovated with high-quality materials and has expensive furniture and fittings. The seafront location was also a key draw, she added.

Word in the market is that the seller invested a few million dollars fitting out the interior, adding sculptures, paintings and decorations, creating a distinctly Chinese theme. He bought the property for S$25 million in 2011 from a seasoned Singaporean bungalow investor.

The two Sentosa Cove bungalow deals year to date follow four transactions in 2015 and three in 2014 - all significantly down from 18 sales in 2013. The best year was 2010, with over 50 transactions.

The record psf on land price for a Sentosa Cove bungalow transaction is still the S$2,989 psf fetched for 81 Ocean Drive in 2010; the absolute price in that deal amounted to S$28.2 million.

Steve Tay, vice-president (resale) of CBRE Realty Associates, said the near-record price set for the latest bungalow deal did not signal a return to peak prices in the waterfront housing district. It was a one-off transaction, reflecting the price premium commanded for a well-located property with seaview and plush fittings and furnishings - compared with a property with average view and design.

Agreeing, Singapore Christie's International Real Estate managing director Samuel Eyo reckons that the major deterrents for Sentosa Cove bungalow deals include the 15 per cent additional buyer's stamp duty (ABSD) payable by foreign buyers on any residential property purchase in Singapore. PRs pay 5 per cent ABSD when they buy their first residential property and 10 per cent on subsequent purchases.

Singaporean bungalow buyers mostly eschew 99-year-leasehold properties (the tenure on Sentosa Cove), noted Mr Eyo. "Families with young children would rather pick up freehold Good Class Bungalows (GCB) in popular areas - many of which are near good schools - than to live on Sentosa Cove, which is not near any schools," he said.

Only Singapore citizens are allowed to buy landed residential properties in GCB Areas under a policy change in the second half of 2012.

On Sentosa Cove, a foreigner - whether a PR or not - is eligible to seek approval to buy a landed home. A non-citizen is allowed to own just one landed residential property in Singapore and that too for owner occupation only.




This article was first published on October 5, 2016. 

Source: AsiaOne

Singapore luxury property 'cheap' for rich multinational buyers, pros say - AsiaOne

Tuesday, Oct 04, 2016

Leslie Shaffer

CNBC

All the obstacles facing Singapore's property market might not be cleared, but one dark cloud over the luxury end has disappeared, analysts said.

Singapore's extremely-high-end properties are now cheap compared with similar luxury properties in other major capital cities, according to Brandon Lee, a property analyst at JPMorgan in Singapore.

After a 15-25 per cent drop in prime and luxury residential prices since the market peak in 2011, Singapore's properties now represent a good deal for ultra-high-net-worth investors who were comparison shopping between capitals, Lee said. Luxury housing in London, Hong Kong and New York was changing hands at prices as much as 165 per cent higher than in Singapore, Lee noted.

That "very attractive" gap was drawing interest from private equity and global property funds keen to buy multiple apartments from developers in "block" deals, Lee said. Family offices and rich individuals were also increasingly interested in making purchases, he noted.

Despite often needing to offer additional discounts to do those bulk deals, developers have a big motivation: Singapore's government does not allow developers to sit on unsold units while waiting for buyers to return to the market. Any units unsold two years after a project's completion face an "extension charge" of 8 per cent of the proportional land cost for the first year, rising to 16 per cent in the second year and 24 per cent in the third.



Some experts told CNBC the recovery in Singapore's ultra-high-end property was overdue.

"Values in the market are a joke in comparison to some markets," such as London, Hong Kong and Monaco, said property investor Alexander Karolik Shlaen, an economist and CEO of Panache Management, a luxury brands and investment adviser.

He noted that Singapore's freehold luxury property prices were running at about $2,000 a square foot, which he said in London wouldn't be considered a luxury price.

Shlaen expected that purchasers who weren't subject to Singapore's Additional Buyer's Stamp Duty (ABSD) rule would also be motivated to buy.

In a bid to rein in its housing market's sharp price rises, from 2011 Singapore's government imposed a series of cooling measures, including the ABSD, which adds much as an additional 15 per cent to the purchase price for foreign buyers and Singaporeans with more than one property.

While the additional cost may not seem terribly onerous for buyers at the high end, it appears to have successfully dampened interest in luxury properties in the city-state.

But due to tax treaties, buyers from some countries, including the US, Switzerland and Lichtenstein, are exempt.
JPMorgan's Lee noted that in an unusual development, Americans became the second-most frequent buyers of high-end Singapore homes in the second quarter. Individuals from Malaysia, Indonesia and China usually dominate the list, Lee said.

"It could reflect that prices have fallen enough to look at the space," Lee said.

But he was quick to note that he only saw Singapore's high-end as having bottomed out; the mainstream housing market still had room to drop, he cautioned.

"If you look at unsold inventory, it's at a record low" for the high end, Lee said, but he added that wasn't true of the mass-market segment, which he said would see further supply growth even amid vacancy rates that were already as high as 15 per cent. That segment also hadn't seen too much in the way of price declines yet, he said.

"The only reason why we've not seen a lot of distressed properties out there is interest rates are still very low. Owners of properties have strong holding power and they're not willing to take a haircut," he said.

Singapore's Urban Redevelopment Authority released a flash estimate on Monday that showed the city-state's private home prices fell at the fastest pace in seven years in the third quarter.

The private residential property index fell 1.5 per cent to 137.9 in the July-September quarter, according to the URA, after falling 0.4 per cent in the previous quarter.

The latest drop was the largest quarterly decline since home prices slid 4.7 per cent in the second quarter of 2009, when fallout from the global financial crisis slammed into Asia and pushed Singapore's economy into contraction.



- Reuters contributed to this report.


Source: AsiaOne