Prices for high-end homes likely to fall by 10-20%
As the average price gap between the high-end and the mass market residential market narrows from 98% (from Q1 2004 to Q1 2012) to 82% in Q1 2012, the high-end home prices will likely fall a further 10-20% as a result of the ABSD. The mass market and shoebox units, however, are benefitting from the low interest rates and increased liquidity, with the mass market residential prices potentially increasing up to 5% and the shoebox units sustaining the higher price premium of 7-9% over non-shoebox units though this may change in 2015.
Signs of change have already been seen, with transactions in the outside central region (OCR) and rest of central region (RCR) in the range of $1,200 – $1,300 psf and transactions in the core central region (OCR) in the range of $1,600 – $1,700 psf. The number of …