In the current environment of cooling measures and a sluggish private residential market, Singapore's upscale residential market does not seem to have lost its appeal entirely. Against this backdrop, projects such as Watten House and the repriced Cuscaden Reserve have regained market attention.
Analysts generally believe that the government is unlikely to relax real estate cooling measures in the short term, meaning that the luxury housing market will continue to face challenges. However, local buyers still show interest in projects with superior locations and reasonable prices, and there is sufficient funding support.
Since its preview started in November last year, Watten House has sold 74% of its units, which is a remarkable sales performance. Reportedly, 95% of buyers are Singapore citizens and permanent residents, with the remaining 5% mainly from the United States and Switzerland. Unlike the typical private residential sales approach, Watten House has adopted a nearly four-month preview period to screen and analyze target buyers while ensuring the privacy of the purchasing experience. The success of this strategy may prompt other developers to adopt similar approaches.
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On the other hand, Cuscaden Reserve has achieved impressive sales figures after relaunching with reduced prices. The project reduced prices by about 20% upon relaunch, attracting many buyers. Previously, the project had only sold 12 units over a span of more than four years.
The price reduction may be aimed at alleviating the additional buyer's stamp duty (ABSD) deadline pressure faced by developers. According to regulations, developers may need to pay ABSD at 15% of the land price for units unsold during the sales period. Although Cuscaden Reserve has been granted an extension, other projects may also consider price reductions under the pressure of ABSD deadlines.
In addition to price factors, the geographical location and scarcity of upscale projects are also crucial factors in attracting buyers. The successful sales of Watten House and Cuscaden Reserve are partly attributed to their prime locations and project scarcity. This indicates that offering suitable products in suitable locations can still capture buyers' attention despite the overall market environment not being optimistic.
Although the luxury housing market faces challenges, some analysts remain optimistic about it. They believe that despite the economic challenges and cooling measures, the upscale residential market still possesses enduring allure and resilience. However, other analysts suggest that the government is unlikely to relax restrictions on foreign buyers before the general election, coupled with economic uncertainties, the demand for luxury housing may not be as robust as that for mass-market private residential properties.
