Singapore luxury residential sales fall but prices stay firm: CBRE
In the high-end apartments market, 92 buildings with an overall transaction value of $964.7 million switched hands in 1H2023, relieving from the 106 units worth $1.085 billion offered in 2H2022. While high-end apartment sales increased in the early 4th months of the year after the reopening of China’s borders in early January, sales slipped in May and June taking after the increasing of additional buyer’s stamp duty (ABSD) levied on foreign customers to 60% that took effect from April 27.
In the GCB market, 13 real estates valued at a collective $525.3 million were negotiated in 1H2023, which is a 14.4% decline from 2H2022 (18 GCBs worth $613.5 million), and a 30.1% loss y-o-y from 1H2022 (29 GCBs worth $751.42 million).
Looking forward, deal volumes in the deluxe non commercial industry will likely stay subdued for the remainder of the year, predicts Tricia Song, CBRE’s head of research for Singapore as well as Southeast Asia. “This can be attributed to a mix of factors to consider, consisting of the dominating air conditioning measures, the uncertain macroeconomic overview, and elevated interest rates, that could leave capitalists adopting a wait-and-see method,” she claims.
Tune adds that existing deluxe property owners are likely to support prices, as healthy leasing returns and a restricted supply of brand-new high-end houses incentivise them to hold on to their possessions.
“Similar to 2022, 1H2023 continued to see GCB interest from freshly naturalised residents and even main executives of traditional businesses, while the current buying by digital economy business owners last viewed in 2021 remained lacking amidst the economic downturn plus hard-hit technology sector,” CBRE adds.
The Fangiono family group in addition acquired another GCB on Nassim Road in March for $88 million ($3,916 psf), the sole largest GCB purchase 1H2023.
However, prices held firm in spite of the decrease in transactions. Based on CBRE’s basket of estate luxury projects, average luxury condominium costs climbed 1.1% to $3,463 psf in 1H2023 from $3,425 psf in 2H2022.
Within the Sentosa Cove territory, property sales also softened contrasted to 2H2022. 7 Sentosa Cove bungalows value $139.4 million were marketed in 1H2023, 32.8% lower than the 10 bungalows worth $207.5 million transacted in 2H2022. For Sentosa Cove condominiums, 50 units amounting to $251.1 million changed hands in 1H2023, 29.8% lower than the 74 units worth $357.6 million sold in 2H2022.
Average costs across both bungalows and also condominiums in Sentosa found boosts in 1H2023 contrasted to 2H2022, with the former rising 11.9% to $2,214 psf and the latter increasing 1.7% to $2,063 psf throughout the first fifty percent of the year.
CBRE emphasize that GCB prices continued to be firm, rising 31.1% contrasted to 2H2022 to get to $2,760 psf in 1H2023. The buildup was sustained by a landmark transaction throughout the first part of the year when a trio of GCBs on Nassim Road operated by Cuscaden Peak Investments were bought by associates of the Fangiono family behind Singapore-listed palm oil supplier First Resources. The three residences were bought in April for an overall of $206.7 million, that works out to $4,500 psf, setting a brand-new record for GCB land rates.
Singapore’s high-end housing industry remained to soften in 1H2023 in the middle of hostile rate hikes by the United States Federal Reserve and a souring macroeconomic background, according to CBRE in a current research study record. Transaction volumes for both Good Class Bungalows (GCBs) and high-end condos decreased in the first part of the year, matching activities in the general real estate industry.