A FORTNIGHT ago, the head of a financial services firm here paid about $1.4 million for an apartment at Newton One, up to $300,000 more than he was willing to pay two years ago.
The two-bedroom unit at Lippo's recently launched Newton One development costs about $1,200 per sq ft.
'Two years ago, I would have paid $900 to $1,000 psf. Come 2012 or 2015, we may be looking at $1,500 to $2,000,' said the 54-year-old Singaporean, who wanted to be known only as Mr Wee.
'I think the upward cycle is just beginning... Singapore is land-scarce. If the economy stabilises and grows, and Singapore becomes a regional centre, property here will not be cheap,' he said.
Mr Wee's optimism doesn't seem misplaced if you go by the breathtaking rate at which high-end property prices are growing here in Singapore.
A year ago, high-end homes were largely selling for as much as $1,400 to $1,600 psf.
The talk was that the 'highest of the high' - the super-luxurious St Regis Residences - could set a new benchmark at $1,800 to $2,000 psf. Fast forward to last week and those numbers seem hopelessly out of date.
City Developments says that an unnamed buyer has picked up a unit at St Regis for more than $3,000 psf.
And the developer hopes to average a sale price of $2,800 psf, way above the previous record of $2,400 psf at the 1996 peak.
Also, 10 new and resale deals have already been done above the psychologically important $2,000 psf so far this year, says property consultancy Savills Singapore.
Ardmore Park - a record-setter at $2,400 psf in the mid-1990s - is starting to report deals of above $2,000 psf this year. Some units at The Ladyhill in the Nassim Hill area, too, have crossed the $2,000 psf mark this year.
In fact, Savills is so bullish, it is now forecasting that prices of $2,000 to $2,200 psf will become the norm in the high-end market over the next 12 months, and it expects the effects of this to trickle down to the lower range of the high-end market.
For example, the deals done for high-end homes costing $1,500 psf and up so far this year have already surpassed the 192 units sold in 2000, a year that witnessed a mini property revival, relative to the property peak of 1996/97, said Savills senior manager of research and consultancy Wallace Chu.
At Grange Residences in Grange Road, for example, prices appear to have been on an upward trend, from a low of $1,510 psf last year to $1,690 psf this year, allowing for variations for the floor and unit size.
Developers are taking huge bets on the continued rise in prices, and have fuelled a revival of 'en bloc fever', whereby old estates are collectively bought and redeveloped.
The prices brought at some recent prime collective sales, such as Beverly Mai in Tomlinson Road and Lucky Tower in Grange Road, are at a level that warrant a sale price of at least $2,000 investor has already picked up three units, including two penthouses. He is believed to also own overseas real estate in London and Paris.
Some units at this development have crossed the $2,000 psf price level, up from their $1,700 psf launch price.
Boosted largely by these high-end deals, private home prices here chalked up the biggest quarterly rise since 2000, up 1.5 per cent in the three months ending March 31 from the preceding quarter. But with property prices in general still more than 30 per cent below the 1996 peak, some people may still be wishing for a more buoyant but riskier sector.
Currently, the number of record-busting deals remains small and has not affected the rest of the market. The good thing about this is that even if there were a high-end 'bubble' and it burst, the Singapore property market would not be hit because the high-end is a small, niche segment catering mostly to foreigners, said OCBC Investment Research analyst Winston Liew.
'It's largely foreign money, so in the event that a correction takes place, it has no impact on the mass market,' he said.
'The dynamics of that segment are totally alien to the mass market.'
He added: 'The bigger mass market is more important. Things are improving there, but not to the same extent as the high-end market.'
Said Mr Christopher Gee, of JP Morgan: 'The reason for buying a St Regis or a BLVD is totally different from why you want to buy an upgrader apartment.' Said another analyst: 'In the next one to two years, the prices of high-end units will either plateau, or the rest of the market will catch up.
'If not, we will start to see two property segments - the low- to mid-end, catering to locals and permanent residents, and the high-end, catering only to foreigners.'
joyceteo@sph.com.sg
