As usual, the news regarding the condition of the luxury real estate market appears at odds with many statements coming from the real estate agencies.
At a recent luxury real estate auction in Fort Lauderdale, Florida, properties were quickly taken off the block after receiving no bids. One penthouse condominium in Williams Island for example, was previously listed for $5.6 million, went on the block for $5million, was dropped to $2.5 million and immediately withdrawn.
Those properties that did sell, invariably sold for much less than previously offered. Two bay-front properties on Venetian Islands sold for $500,000 and $1 million – the last time they changed hands, back in 2005, the same properties sold for $2 million and $2.75 million respectively.
Yet at the same time, The Star quotes SKY Sotheby’s president Chad Roffers as saying: “The high end is resilient. Certainly the market has corrected since the peak of 2005. What we are seeing is that quality waterfront inventory is holding value." Which rather contradicts the prices achieved.
Unsurprisingly, many of the sales went to foreign buyers.
In London, much the same story unfolds. Prices realized and analysts opinion are in sharp contrast to the real estate agents opinions.
Savills are predicting that the amount of money available to invest in high-end properties will fall by as much as 65% this year. This thanks to smaller bonuses in the city as the banks start to feel the effects of mortgage write-downs in the USA sub prime market. Traditionally, London’s luxury property market has relied heavily on bonus laden financial brokers propping prices up.
Having said that, Knight Frank claims to have sold 40 of the 80 available apartments in the One Hyde Park development. Once again, the bulk of the sales were to foreign buyers – of the 40 sold so far, 13 were to Russian buyers, 10 to Middle eastern and just 8 to British buyers. One would have expected them all to have sold by now in a strong market, but the average sale price is around £20 million.
Donald Trump hit the news recently also. A recent press release from "Ultimate Homes," said: Donald Trump’s much-publicized Palm Beach mansion has a new price: $100 million. Along with the $25 million price reduction, Trump also turned the listing over to Lawrence Moens, a Palm Beach broker who has a reputation as a low-key but highly effective dealmaker.
When it debuted on the market in 2006, the estate’s $125 million price tag made it the most expensive property for sale in America and generated a great deal of attention. It took the No. 1 spot in that year’s edition of Ultimate Homes, and, most importantly, it was one of the first, if not the first, to break the $100 million price point.
While the media always has focused on price, what makes this estate so important, according to Moens, are the 6.75 acres and almost 500 feet of unobstructed oceanfront. Also significant is the location itself, which he describes as “prime, one of the most desirable places on the Eastern seaboard.”
Another change, according to Moens, is the potential that the property could be sold as two separate parcels or a single compound.
The price change means Trump’s estate is no longer one of the five most expensive residential listings in the country, although it is still in the top 10. Unique Homes is currently compiling its annual list of the 1,000 most expensive properties on the market in the country. This list is published in a magazine called Ultimate Homes, which also will include the 10 priciest listings in each state. Ultimate Homes is a new magazine, launched this May.
Hong Kong set a new record with the sale of Branksome Crest’s three thousand square foot penthouse duplex apartment for more than $20 million – over $4,000 per square foot.
After great deal of activity in the market, luxury property developers in Beijing increased asking prices, and the PBOC increased the property mortgage loan interest rate for loans that are to be used for purchasing a second home, causing the market to slow slightly. Overall, the price of luxury condominiums increased by 8.8% in 2007. Luxury villas and apartments remain in short supply and the average price for a luxury apartment is now over $3,000 psm. The Olympics boosted demand for serviced apartments and the luxury residential leasing market saw an increase in prices of 5.6% in the last quarter of 2007 to over $30 per square meter per month.
Singapore, like many luxury property markets, saw record prices. SC Developments, The Marq on Paterson Hill, for instance, sold out within hours of release – the most expensive unit selling for $31 million. The price of more than $5,000 per square foot set the new record. According to Merrill Lynch, the number of millionaires living in Singapore rose by 21% in 2007. Developers all over Singapore are tearing down older buildings to redevelop into luxury condominiums in the hope of repeating The Marq’s success.
Kuala Lumpur’s skyline will be completely redefined soon. The number of luxury developments currently under construction is quite staggering. OneKL and The Troika should be complete by 2009. OneKL set new standards in prices for luxurious accommodation when it was launched, but The Troika surpassed even that – 70% sold out already. Four of the eight penthouses were sold to foreign buyers. The 4 level, 21,000 square foot “Luxurious Penthouse,” reportedly sold for $18 million – a new record for KL. Foster & Partners, world renowned British architects, designed the building with GDP Architects.
{ 1 comment… read it below or add one }
very interesting, thanks for sharing this FYI… i’m often caught dumbfounded about real estate business, so i’m trying to read about it, thanks again… “:)
{ 1 trackback }