Luxury projects post maximum $3,400 psf launch price

With higher launch prices last quarter compared with 2008, the luxury residential market is set for expected rebound.

CBRE Research Asia reported in its latest Q4 2009 Luxury Residential Report in Asia Market View that during the fourth quarter developers ran short of supply of mass-market projects and began to focus on launching projects in prime districts.

The upmarket project Marina Bay Suites, for instance, sold 88 of 92 units at its debut last November at an average price of $2,300 psf. Meanwhile 60 units of Urban Suites were sold at $2,400-$2,700 psf in December. Six luxury villas of only 13, on the other hand, were reportedly purchased at Kasara the Lake, between $14 million and $22 million.

CBRE Research Executive Director Li Hiaw Ho said, “The response to these high-priced projects demonstrates the beginning of a revival in the luxury residential segment. It is likely that this interest in luxury homes is sustainable given the low interest rates and improving economic environment. However, as homebuyers will be less impulsive and more discerning following the latest government measures, we are unlikely to see runaway prices the way it happened in 2007.”

Launch prices for new luxury projects were between $2,500 psf - $3,400 psf in the fourth quarter of 2009, compared with $2,100 psf - $2,700 psf range in 2008.