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In Singapore, bargains for luxury homes are few and far between

The skyline from Mount Faber in Singapore, on Monday, Nov. 23, 2020. Singapore�said its economy will probably expand 4% to 6% next year amid a global recovery from the worst of the coronavirus pandemic and as travel restrictions and local safety measures are eased. Photographer: Lauryn Ishak/Bloomberg (Bloomberg)Premium
The skyline from Mount Faber in Singapore, on Monday, Nov. 23, 2020. Singapore�said its economy will probably expand 4% to 6% next year amid a global recovery from the worst of the coronavirus pandemic and as travel restrictions and local safety measures are eased. Photographer: Lauryn Ishak/Bloomberg (Bloomberg)
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The priciest condos have been slower to sell, but overall, the high-end market rebounded quickly after the coronavirus outbreak

Priyesh Shah looked at more than a dozen high-end apartments in Singapore as he searched recently for a permanent home for his young family. The New Jersey native has worked in Singapore for eight years and, like many others, hoped the coronavirus-triggered economic downturn would be a good buying opportunity.

Instead, the tech professional found that prices had barely budged and that many new condos were quickly being snapped up. “It’s a stable market without any ridiculous deals," says Mr. Shah. “I don’t think it works like that here."

Mr. Shah has since made an offer on a property.

While some developers trimmed prices by as much as 10% during the partial lockdown this past summer, the luxury-home market in this prosperous Southeast Asian island-nation bounced back more quickly than most other global cities. In central Singapore, where home prices are high, 2,177 apartments were sold from January to September, up from 1,797 in the year-ago period, government data show. The median price per square footage also increased, by 7.5% to $1,705.

Among the new homeowners is Chinese tycoon Huang Youlong, who bought a penthouse from billionaire property scion Kishin RK for $20.6 million, according to a person familiar with the transaction.

Mr. Huang’s purchase belies the bifurcation of the local luxury market. Condos priced under $3.5 million have been selling, agents say, but more-expensive units are moving slower, despite the tight supply of statement penthouses.

In January, Desmond Quek moved into a three-bedroom, 50th-floor unit at Wallich Residence that he bought for $2.5 million. “An impulse was triggered by the ‘wow’ factor," says the 43-year-old Singaporean eye surgeon of his apartment’s sprawling views.

Dr. Quek was initially worried about the cost of financing his new home during the lockdown, when his income momentarily took a hit, but said he doesn’t regret the timing of the purchase. “It felt like I had the whole building to myself," he says about the lockdown. “That’s the price of vanity."

Rules for foreign ownership, made more complicated by the pandemic, add to the divisions in the market. Foreigners typically have been the buyers of the higher-price apartments because of government restrictions on ownership of the bungalows on large land plots that are the preferred properties of locals.

And while Singapore has been selectively easing the ban set in March on foreign entries, potential buyers seem wary. Brokers say that Chinese clients have started reaching out again, but the number of $5 million-plus deals this year has been relatively small.

“We have quite a number of people who are very interested but want to take a look before making a decision," says Cheng Hsing Yao, group managing director of GuocoLand, a luxury developer that recently sold about a half-dozen multimillion-dollar condos across Singapore in virtual transactions alone.

To understand the impact of the loss of wealthy Chinese, Indonesian and American buyers, look to Singapore’s skyline. Over the past half-decade, it has been transformed by developers catering to a wave of international buyers seeking mixed-use towers that blend offices, hotel and residences.

Those buyers include British industrial-design billionaire James Dyson, who last year paid a record $54 million for a 21,108-square-foot penthouse at Wallich Residence, which occupies the top portion of a 951-foot skyscraper with 360-degree views of Singapore, Malaysia and the Indonesian islands. (The building received special dispensation to exceed local height restrictions.) Mr. Dyson, who has another home in Singapore, recently sold the penthouse for $46 million to an Indonesia-born entrepreneur.

Meanwhile, four penthouses at Boulevard 88, a condo development—popular with Chinese buyers—attached to an Edition-brand hotel and set to be completed in 2022, were acquired last year for between $20.5 million and $22.75 million.

In December, a 4,424-square-foot apartment at South Beach Residences, part of a mixed-use development with 190 luxury units, offices and a five-star JW Marriott hotel that overlooks a Formula One racing route, was sold for $12.6 million.

Despite the dearth of foreign buyers this year, developers have avoided slashing prices, as buyers with deep pockets scoop up the relatively small number of ultraluxury homes currently available, says Christine Sun, head of research at OrangeTee & Tie.

“Luxury buyers don’t [really] have a budget constraint," says Mr. Cheng, whose company developed Wallich Residence. “If they fall in love with a property, they will go for a bigger unit because they want the best. It is very different from the mass market."

There are signs that a new wave of wealthy buyers is about to enter Singapore. Beijing’s political crackdown in Hong Kong has encouraged some hedge-fund and family office managers to relocate to this majority-Chinese city, while Chinese tech giant Tencent and TikTok owner Bytedance have said they would invest billions in setting up regional hubs there.

Among those hoping to take advantage of the recovery is Kamal Duhra, a homemaker who is asking $4.66 million for a four-bedroom unit at luxury condo the Grange that she and her portfolio-manager husband, Sat Duhra, acquired for $3.45 million in 2017. The pair are looking to invest their proceeds into a rural property in their native Britain, where the stamp duty on higher-end home purchases was recently cut.

“We’re not desperate to sell, but if the right offer comes along…" she says. The apartment is listed with Sunita Gill at Singapore Luxury Homes.

For the global elite, property prices in Singapore are low compared with financial centers such as New York and Hong Kong, where the most desirable homes have traded for more than $100 million. Because Singapore is densely populated, the government pursues a policy of gradual price appreciation through measures such as stamp duties and a cap on debt to 60% of a buyer’s gross monthly income.

“As a result, there’s not much speculation in the market," says Lee Mei Ling, executive vice president at City Developments, which built Boulevard 88 and South Beach Residences. “That is why we are not seeing a knee-jerk reaction at this point compared to previous crises."

Some have their eye on 2023, when 3,514 new units are expected to be completed in downtown Singapore, up from 1,553 in 2021.

“Most people aren’t feeling the impact of oversupply because completion is in three years’ time," says Christine Li, head of research at Cushman & Wakefield Singapore. “But it is always in the mind of some investors who have gone through that before."

This story has been published from a wire agency feed without modifications to the text

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