But the recovery may not be sustainable.
After being shunned by international buyers for over two years, Singapore’s ultra-luxury home segment are now finally back in investors’ radars as prices drop to attractive levels.
“In Singapore, we have seen a handful of transactions of ultra-luxury homes in the first quarter this year, which have exceeded market expectations in terms of typical prices for this most prime segment,” said Alice Tan, Director and Head of Consultancy & Research, Knight Frank Singapore.
Overall non-landed home prices in the Core Central Region (CCR) rose by 0.4% in the first quarter, signalling a 'green shoots of recovery' for the ultra-luxury segment.
“High-net worth individuals [are seeing] rising value proposition for Singapore luxury homes after a prolonged two-year period of price declines,” Tan added.
“The return of interest from wealthy buyers at the start of 2016 also testifies their preference for Singapore homes and showing confidence in Singapore's long-term prospects; supported by our stable country fundamentals, growing importance of Singapore as a key gateway city in Asia, safe haven status and the very high quality of luxury homes which now present greater value compared to most gateway cities,” she added.
However, it remains to be seen if the recovery can be sustained for the next three quarters as overall global economic growth remains relatively uncertain.
“With the Singapore economy facing strong headwinds, businesses could see weakening earnings which can possibly impact the buying appetite of business entrepreneurs and high-net worth individuals for high-priced homes going forward into end-2016,” she noted.
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