THE luxury and high-end homes market has been on a roll, with prices hitting a succession of record highs for much of the year.

Developers still have plenty of upcoming projects in the core central area of the country, but sales and enquiries have slowed recently from the frenetic pace witnessed earlier in the year.

Some consultants say the sector still looks good, but growth will be moderated.

For next year, Savills Singapore's director of marketing and business development, Mr Ku Swee Yong, said prices in the luxury sector are going to grow at a normal pace of "merely" 10 to 15 per cent.

That is a reasonable expectation given that demand will come from Singapore's ultra-rich, as well as the new high net worth individuals brought into the country by private banks and foreign investments or private equity, he said.

The market recovery, which began in 2004, was led by the high-end sector from day one.

Prices in this sector have crossed the $5,000 per sq ft (psf) mark, and apartments have sold for more than $20 million.

Some industry observers believe that the market has risen too fast too soon and that it would be wise to view these high prices with some caution.

Market momentum has already been hit by the uncertainty in the stock market brought about sub-prime woes in the United States. The Government's recent axing of the deferred payment scheme has also toned down the party mood in the high-end market.

"The beauty of the deferred payment scheme is that it allows you to lock in the deal first and then see if you can sell the property," said a seasoned industry observer. "Without the scheme, some buyers will be constrained in their ability to purchase."

For instance, speculators holding on to several properties might not find it easy to obtain loans, he said.

Observers say speculators have helped drive up the high-end property market, because they buy to make quick sales at even higher prices.

Government data shows that prices of non-landed private homes in the core central region rose by 17 per cent last year, compared with less than five per cent for the rest of Singapore. 

But other parts of the country have since caught up, with sharp rises seen in the past two quarters.

"Luxury properties still have their fair share of buyers. It's just that their prices have gone up so sharply that mid- and mass-market properties look more attractive," said an investor.

That might not mean it is time to dump your luxury properties in favour of mass-market ones because the key is to have a balanced portfolio and a mid- to long-term investment horizon, he said.

Savills' Mr Ku believes the top-end segment could see another major move upwards, provided certain events take place.

One would be a climb in mass-market prices to an average of $1,000 psf, from around $600 to $700 psf now. Mid-tier markets, such as as Balestier and Novena, would also need to regularly achieve $2,000 to $2,500 psf.

If this happened, it would lend very strong support to the luxury sector, and would allow the very top end of the market to move up and breach the $6,000 psf mark, said Mr Ku.

In addition, there will be "one-off" events, such as Formula One, that will bring the well-heeled to Singapore and maybe prompt them to invest.

Mr Ku said the Beijing Olympics will bring increased investor attention to Asia next year, while the Marina Bay Sands opening in 2009 will focus more attention on Asia and Singapore.

The opening of the Sentosa integrated resort and Universal Studios in 2010 will only add to the interest.

In terms of prices, The Orchard Residences at Orchard Turn is said to hold the record for being the costliest condo, at $5,600 psf.

There is no definitive guide, but ultra-luxurious properties could be said to be those costing from around $3,000 to $3,500 psf. This segment, by virtue of the prices the properties command, is an exclusive one that dances to a different tune from the rest of the market.

It is targeted at the super-rich, not just in Singapore but from all over the world, said DTZ Debenham Tie Leung executive director Ong Choon Fah.

And developers targeting this narrow segment are not in a hurry to sell, as they hope to raise or maintain their prices. 

Mrs Ong said that, if they continued to be innovative, they would have pricing power.

However, it might be wise to bear in mind that prices of high-end homes have gone way beyond their last peak in 1996, said the seasoned property investor.

"Mass-market prices are still below their last peak, but high-end properties have crossed $5,000 psf, when their last peak was at $2,500 psf."

It is anybody's guess where the very top end of the market is headed, he added.

While Singapore's ultra-luxurious homes have been considered good bargains relative to those in London or New York, Singapore is after all not London or New York, he warned.

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