Chinese buyers are returning to Singapore’s luxury apartment market as Klimt Cairnhill reopens

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Marina View Residences IOI Properties

After reopening the sales gallery in Klimt Cairnhill on Jan 3 following an extended closure of six weeks that saw the three showflats being renovated The showflats have been renovated Low Keng Huat is who is the property developer in the 138-unit luxury condominium located on Cairnhill Road has closed on 18 sales. The total in units sold at 25 (28.4%) out of the 88 units that have been released up to date. The average cost achieved was $4,061 as of Jan 31st.

Marina View Residences IOI Properties is the winner after submitting the only bid amounting to $1.15b equivalent to $1,378.5 psf.

Alvin Teo, executive director of Low Keng Huat, says Singaporeans comprised 25% of buyers, while permanent residents made up another 10%. A further 25% of buyers are from foreign countries in Southeast Asia, namely Indonesia, Cambodia, Myanmar and Vietnam.

But, it was Chinese nationals that drove the growth of Klimt Cairnhill since the start of the year. They made up 40% of buyers, according to Teo. There’s been a rise in the interest of Chinese buyers since the lifting of travel restrictions in China on January 8, following a three-year lockdown on Covid-19.

“Many among these Chinese buyers are relatively new in Singapore,” says Dominic Lee PropNex’s director for the team that deals in luxury. “They require large apartments that have freehold tenure as well as an address in the district that is prime. There’s not much new inventory of these properties available at present. That’s why many of the four-bedroom, large units located at Klimt Cairnhill were taken up by Chinese buyers.”

Since Covid-19, the demand for larger units has increased. In the time that Klimt Cairnhill previewed in August 2021, only the largest units — threeand four-bedroom apartments, as well as penthouses were made available to the market for auction.

Big units in demand
There are two penthouses in Klimt Cairnhill There is a 4,898 square feet, six-bedroom simplex located on the 36th floor and a 5,290 sq . ft duplex that has six bedrooms located on the 35th and 36th floors.

The simplex penthouse was auctioned off at the end of November in 2021 to a buyer who paid $26million. At $5,309 per sq ft in relation to the floor space the penthouse broke the record in the area of development.

Two parties are competing for the 5,920 square feet duplex penthouse: a local and one Chinese national. If the penthouse is priced higher than $5,300 The price of the total ticket of the penthouse will be higher than 30 million. PropNex handled the transaction.

Low Keng Huat offered multiple-unit buyers the possibility of combining two four-bedders located on the same floor in order to satisfy the need for spacious units with more than 4,500 sq ft of area. The two units will include six bedrooms with ensuites and will be connected via an internal staircase as well as a private lift. The building Klimt Cairnhill offers two kinds of four-bedroom apartments — 2,056 sq feet and 2,368 sq ft, the units that are amalgamated will be duplexes that measure 4,112 sq feet and 4,736 sq ft each.

Seven of the units with four bedrooms sold were to buyers who bought multiple units, including those who purchased the units with family members. Certain buyers were offered the option of combining their units. The buyers were mostly Chinese as well as Southeast Asian buyers, says Low Keng Huat’s Teo. To date no one has been interested in the idea of merge the two companies.

Ken Low, the managing partner of SRI Ken Low, who is the managing partner of SRI, has no reason to be surprised by the interest in the four-bedroom units in Klimt Cairnhill after the firm was able to broker the sale of the first unit, which was 2,056 sq feet located on the 33rd floor, to $7.72 million ($3,755 per square foot) on January 7. The buyer is believed to originate from China. “Attention was paid towards Klimt Cairnhill after the large units in Park Nova, which comprised 54 units Park Nova had been closed,” says Low. The even the Les Maisons Nassim which is home to only 14 units which have the smallest sizes with a floor area of 6,049 sq feet and starting at 35 million dollars, had sold 11 units as of. The most recent sale in Les Maisons Nassim was for the 6,179 square foot unit on the second level , which was worth $36 million ($5,827 per square foot) Based on the caveat that was lodged.

“Larger than average unit sizes’
In Klimt Cairnhill, it is not only the four-bedroom apartments that are large, but also the three- and two-bedroom apartments are “larger than the average” according to Teo. The two-bedroom apartments at Klimt Cairnhill are sized at 829 sq ft. They also have two bedrooms plus study units that are 893 square feet. Three-bedroom units come in two dimensions: 1,432 sq ft and 1,496 sq feet.

Since the beginning of the year Teo states that there’s seen an increase in inquiries for the two-bedroom units , particularly from local buyers, mostly families with children. Teo attributes this in part to Klimt Cairnhill’s closeness to schools and schools, with Anglo-Chinese school (Junior) situated within a distance of 1km; Eton- House International Preschool, just two minutes away, as well as Anglo-Chinese Schools (Barker Road), St Joseph’s Institution and Singapore Chinese Girls’ School within six minutes of driving.

Given the increased interest in the two-bedroom types, Low Keng Huat is releasing all 50 units of two- and two-bedroom-plus-study apartments when it relaunches Klimt Cairnhill on Feb 6.

Two-bedroom apartments will cost between $3,200 to $3,600 per square foot. Prices for the 829 sq feet, two-bedroom units begin at $2.65 million for the floor with the lowest price and go up to less than $3 million for the top floor. The two-bedroom plus study units with 893 square feet will come with the units costing between $2.86 million to $3.2 million.

The return to the ultra-rich Chinese?
The high demand for large apartments and penthouses in high-end areas was also evident in 3 Orchard By the Park. According to the sources an Chinese buyer purchased two duplex penthouses within the Prestige Penthouse Collection. Each duplex measures 6,092 square feet and features five bedrooms and the pool. They also have interiors created by Formwerkz to the cost of $1.7 million per.

The buyer is planning to merge the two penthouses duplex. The price of the purchase is thought to be around $60,000 for each penthouse that is the price per unit that ranges from $4,963 to $5.029 psf. According to market sources ERA brokered the deal.

“This may be the time that the luxury market is able to see more notable deals thanks to the return of wealthy Chinese,” says Mark Yip the CEO of Huttons Asia. “This might not be included in the caveats since it’s not required to submit the caveat. Some deals be governed by a different arrangement or are bought under the non-China passport.”

Foreign buyers, specifically those from China are seeking to buy units for their personal for their own use, according to Doris Ong, deputy CEO of ERA Singapore. “They would like units they can relocate within a short time. The majority of them have conducted their research before arriving in Singapore. They’re pretty sure they have an idea of what they would like to purchase. The purchasing decision can be made much quicker.”

Narrowing price gap draws Singaporean value-seekers
ERA’s Ong believes that the two-bedroom units are attractive to those looking for an apartment in the District 9. The two-bedroom units offer an entry cost that is more affordable for young couples or those who are looking to be near relatives, she adds. “Their parents can purchase the unit for them or help in the down cost.” She also says the higher rates of interest will not be a issue for buyers in this category.

Another reason for the increase of interest in condominium projects within CCR is that Core Central Region (CCR) is the shrinking gap in price in comparison to city fringe or Rest of Central Region (RCR) projects. In the entirety of this calendar year, median cost for RCR project was $ 2,242 per square foot and that of CCR project was at $2,806 per sq ft. This shows a difference of only 25.2% in 2022, as compared to 42.7% over the past decade between 2012 and 2021, according to Huttons Asia.

In December, brand new RCR projects were sold at an average price of $2,648 per square foot and CCR projects were priced at $2,886 per sq ft and the gap among the two sectors shrinking to 9%. “If prices are to remain steady by 2023, this gap in price would remain and there will be more buyers seeking to purchase a home in the CCR project because it might be more value-added,” says Huttons’ Yip.

This may be the cause of the rise in sales of other freehold projects within the CCR which were launched earlier. A good instance could be the Perfect Ten located in Bukit Timah that was launched just only three days after the December 2021 round of measures to cool. The 230-unit freehold project located on Bukit Timah Road, in District 10’s most sought-after district is more than 81.3% sold to date. The average price between December 2021 through December 2022 was $2.995 per sq ft. In the 10 units that were sold this year the average price jumped to $3,207 per fsf.

Another project that was relaunched at beginning of the year with a brand-new display gallery as well as a sales area. The Cairnhill 16. It has 39 units. Cairnhill 16.. Since January 5 eight units were sold. The majority of buyers are believed be local Singaporeans purchasing to move in since the project is set to completion in the 4th quarter of 2023. The units sold on average were $2,682 per square foot according to caveats that were lodged. “Cairnhill 16 has smaller unit sizes , and is more affordable quantum costs that draw Singaporean homeowners and investors,” says SRI’s Low.

He attributes a portion of the demand for homes at Cairnhill 16 Perfect Ten and Klimt Cairnhill due to the change to the ministry of education’s main one-school registration system in the last year. “With less places available for children from the Phase 2A which includes alumni, parents who wish their children to attend their school of choice may have decided to purchase an apartment in a condominium located within a mile of the school in order to improve the likelihood of their children attending,” adds Low.

In the wake of Chinese wealthy and Singaporean buyers scouting houses in the CCR Low Keng’s Teo believes that “the timing of the restart of Klimt Cairnhill is much better for those looking to buy a home” due to the less time-consuming project’s completion time as well as a Temporary Occupation Permits expected to be issued towards the close of 2024 or in the early part of 2025.

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