OPINION: AS the movie adaption of Crazy Rich Asians storms Hollywood, all eyes are on the displays of opulence from the characters – and high-end living in the cities themselves.
Singapore takes a starring role as the hometown of author Kevin Kwan’s crazy rich protagonist, Nick Young. Real estate in the city-state can be eye-wateringly expensive – the most expensive apartment sold was reportedly a 10,300 square feet super penthouse at Sculptura Ardmore that went for over S$60 million (US$43.8 million) last year.
Yet prices for larger homes can go even higher. A three-storey penthouse at Wallich Residences has a price tag of S$108 million (US$79 million), and comes equipped with a dedicated lift, private pool, cabana, jacuzzi room, entertainment area and views of Marina Bay, towering skyscrapers and the island of Sentosa.
Sometimes money can’t always buy everything. Over at The Marq, located at Paterson Hill, a three-storey penthouse spread over 17,500 square feet is priced at S$128 million. But developer SC Global previously announced that it’s not for sale.
The Marq and Sculptura Ardmore are both located in District 10, which “has always been favoured by wealthy, well-heeled investors as it is home to prestigious addresses, including Nassim, Ardmore, Draycott, Cuscaden, and other prime areas,” says Ong Teck Hui, research director, JLL Singapore.
He adds the latest cooling measures introduced by the Singapore government in July, which include raising Additional Buyer’s Stamp Duty and tightening the loan-to-value limits on residential property purchases are likely to moderate price increases in the residential market, but a correction is not expected unless the macro-economic environment deteriorates.
Chinese property money
While Hong Kong and China are not key locations in the upcoming movie, they are the main playgrounds of the characters in Kwan’s second novel, China Rich Girlfriend.
And real estate in the world’s most expensive city unsurprisingly comes with a huge price tag. The place to be is Mount Nicholson on The Peak. Two apartments there made headlines last November for being Asia’s costliest homes in terms of terms of square footage when an undisclosed buyer paid HK$1.16 billion (US$149 million).
But the most expensive home on record in Hong Kong goes to the 9,212 square feet mansion on 15 Gough Hill Road, also on The Peak. It was purchased by the chairman of Shenzhen-based firm Cheung Kei Group, Hongtian Chen, for HK$2.1 billion (US$270 million).
Luxury home prices in Hong Kong show no signs of abating. According to Denis Ma, Head of Research, JLL Hong Kong, the recent announcement of a new vacancy tax, which gives developers 12 months to sell or lease all units after a building’s occupation permit is issued – or face heavy fines, is likely to present a unique opportunity for buyers to acquire luxury properties in the primary market as developers adopt a more cautious pricing strategy. Developers are also likely to be less aggressive when bidding for future sites to offset the additional development risks from the new tax.
In addition, Hong Kong’s housing market faces challenges from imminent interest rate hikes and more volatility in the equity markets.
“Still, with the supply of luxury properties being limited across the city, we expect pricing in general to remain well supported,” he adds.
Meanwhile, the Mainland isn’t far behind with ultra-luxurious properties where a 32-bedroom, 32-bathroom property built in the style of classical Chinese garden home was sold for 1 billion yuan (US$154 million). Located on a private island in Suzhou facing Dushu Lake, the sprawling 72,441sqft home is China’s most expensive home. It took three years to build and every aspect of its design adheres to fengshui principles.
Rich city problems
As glamorous as these properties sound, they belie a larger issue of rising property prices and unaffordability for the majority of the population in both Singapore and Hong Kong. House prices continue to rise in China as well despite the government’s efforts.
And while younger people increasingly turn to co-living to find more affordable accommodation in Hong Kong and Singapore, developers are responding to new government controls by shrinking the size of apartments yet further.
Average apartments lost 39 percent of their floorspace between 2013 and 2017 to measure just 628 square feet although many are smaller still. In Tuen Mun, for example, units can stand at just 128 square feet while in Discovery Bay, apartments measuring under 100 square feet are in the pipeline.
“Affordability ratios are off the charts,” says Ma. “Developers are building units to match the amount of money the average buyer has to spend. They are building exactly what they think the market will absorb.”
And that is a world as far as it can be from the rarefied circle that is Crazy Rich Asians – and their kind of real estate.
By Serene Lim, Senior Communications Manager, Asia Pacific, JLL.* This feature first appeared in JLL Real Views.
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