The price gap between high-end and mid-range private homes has narrowed significantly over the past five years, from 56.5% to 16.9%. At the same time, the rate of local purchases of upscale private homes is on the rise.
With the introduction of a new round of cooling measures, analysts surveyed generally believe that the growth of high-end private property prices will slow down and that more locals will "move up" to become high-end private property buyers.
According to data provided by Huttons Research, the median sf price of new projects in the Core Central Region (CCR), which represents upscale private housing, rose by around 7 per cent to $2,912 at the end of April this year, from $2,717 in 2018, prior to the coronary epidemic. In comparison, the median sf price in the other Central District (RCR), which represents mid-range private housing, rose from $1,736 to $2,491 over the same period, an increase of 30 per cent.
As the mid-range private homes rose more sharply than the high-end private homes. This has led to a narrowing of the price gap between the two.
Prices of mid-range private homes have risen faster than those of high-end private homes, mainly due to the launch of more new mid-range projects and stronger demand from upgraders.
While new mid-range private property prices have risen significantly, resale private property prices have lagged behind, as resale private property has generally been slower to keep up with new project prices.
In general, foreign buyers tend to purchase high-end private homes. 159 high-end private homes were purchased by foreign buyers in the first quarter of this year, an increase of 123.9% year-on-year, accounting for 62.3% of high-end private home transactions, a significant increase from 49.0% a year ago.
With the government's new round of property cooling measures introduced at the end of April, which significantly increased the Additional Buyer's Stamp Duty (ABSD) on property purchases by foreigners from 30 per cent to 60 per cent, analysts surveyed generally believe that this may affect foreign buyers' buying sentiment and that the growth rate of high-end private property prices will slow down this year.