Singapore luxury residential sales fall but prices stay firm: CBRE

In the luxury residences market, 92 real estates with an overall proceeding worth of $964.7 million changed hands in 1H2023, alleviating from the 106 units worth $1.085 billion marketed in 2H2022. While high-end condominium sales rose in the early 4th months of the year right after the resuming of China’s borders in early January, sales slipped in May and also June following the increasing of additional buyer’s stamp duty (ABSD) levied on international buyers to 60% that took effect from April 27.

Nonetheless, costs held firm despite the decrease in purchases. Based on CBRE’s basket of freehold luxury projects, common luxurious residence rates rose 1.1% to $3,463 psf in 1H2023 from $3,425 psf in 2H2022.

CBRE accentuate that GCB rates remained company, rising 31.1% contrasted to 2H2022 to get to $2,760 psf in 1H2023. The growth was sustained by a landmark deal during the 1st half of the year when a trio of GCBs on Nassim Road operated by Cuscaden Peak Investments were purchased by members of the Fangiono family group behind Singapore-listed palm oil manufacturer First Resources. The 3 residences were bought in April for a total of $206.7 million, which works out to $4,500 psf, setting a brand-new report for GCB land rates.

The Fangiono family group also acquired one more GCB on Nassim Roadway in March for $88 million ($3,916 psf), the sole largest GCB sell 1H2023.

Singapore’s deluxe residential market remained to relax in 1H2023 in the middle of aggressive rate increases by the US Federal Reserve and also a souring macroeconomic backdrop, according to CBRE in a recent research study credit report. Deal quantities for both Good Class Bungalows (GCBs) as well as luxury apartments decreased in the very first part of the year, mirroring motions in the general property market.

Altura EC Singapore

Standard costs across both bungalows and condominiums in Sentosa saw boosts in 1H2023 compared to 2H2022, with the past rising 11.9% to $2,214 psf and also the latter rising 1.7% to $2,063 psf during the very first fifty percent of the year.

In the GCB market, 13 estates valued at a shared $525.3 million were transacted in 1H2023, which in turn is a 14.4% downturn from 2H2022 (18 GCBs worth $613.5 million), and a 30.1% fall y-o-y from 1H2022 (29 GCBs worth $751.42 million).

Song adds that existing luxury home owners are most likely to support rates, as healthy rental returns as well as a limited supply of new high-end houses incentivise them to hold on to their possessions.

Within the Sentosa Cove territory, property sales also relaxed compared to 2H2022. 7 Sentosa Cove bungalows cost $139.4 million were sold in 1H2023, 32.8% less than the 10 bungalows worth $207.5 million transacted in 2H2022. For Sentosa Cove condos, 50 units totaling up to $251.1 million changed hands in 1H2023, 29.8% lower than the 74 units worth $357.6 million sold in 2H2022.

Looking forward, deal quantities in the luxury residential marketplace will likely remain subdued for the remainder of the year, forecasts Tricia Song, CBRE’s head of research for Singapore and also Southeast Asia. “This can be credited to a mix of considerations, consisting of the prevailing cooling measures, the unpredictable macroeconomic expectation, as well as raised rates of interest, that could leave capitalists adopting a wait-and-see method,” she claims.

“Similar to 2022, 1H2023 continued to view GCB interest from recently naturalised residents along with key execs of conventional companies, while the current purchasing by digital market entrepreneurs last viewed in 2021 continued to be absent in the middle of the financial slump and even hard-hit technology field,” CBRE includes.