Chart of the day: Will H2's expected slowdown sink Singapore’s luxury home market?

Developers' pricing schemes are triggering a flight to value.

Thanks to a spurt in sales in the first half of 2016, Singapore's luxury apartment market is braced for the expected slowdown in H2.

According to a report by CBRE Research, the 1H16 saw the sale of 131 luxury apartments worth $5m and above. This amounts to 76% of the 166 units sold in the whole of 2015.

CBRE asserts that the spike in sales is thanks to creative pricing packages and payment schemes which triggered a flight to value. 

"Among the developments that contributed to the H1 2016 volume was Ardmore Three, which alone sold 34 units. The units were priced at $3,200 psf after a 15% discount plus a 15% cash rebate for additional buyer's stamp duty," CBRE asserts.

"Other projects included Leedon Residence (11 units), Goodwood Residence (6 units) and Gramercy Park (4 units)," it adds.

At end-June, the overall median price of luxury apartments stood at $2,950 psf, marking a jump from $2,700 at end-2015. Further, the most expensive luxury apartment sale in H1 was a seventh floor unit in Le Nouvel Ardmore, which sold to the tune of $21m ($4,006 psf).

CBRE posits that these sales have put luxury apartments in a good position to perform better in 2016 compared to 2015 despite an expected slowdown in 2H16 on due to an absence of new launches. In addition, prices could also hold firm as pipeline stock is limited.