Singapore luxury residential sales fall but prices stay firm: CBRE

Singapore’s high-end housing market remained to relax in 1H2023 amid aggressive price increases by the United States Federal Reserve and also a souring macroeconomic background, according to CBRE in a recent study report. Transaction quantities for both Good Class Bungalows (GCBs) and also luxury apartments declined in the very first part of the year, mirroring activities in the overall property industry.

“Comparable to 2022, 1H2023 remained to view GCB demand from freshly naturalised citizens along with primary execs of conventional businesses, while the active purchasing by digital economy entrepreneurs last observed in 2021 remained absent amid the economic recession and hard-hit tech industry,” CBRE adds.

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CBRE highlights that GCB rates continued to be firm, increasing 31.1% compared to 2H2022 to reach $2,760 psf in 1H2023. The growth was sustained by a landmark deal during the 1st part of the year when a trio of GCBs on Nassim Road owned and operate by Cuscaden Peak Investments were acquired by associates of the Fangiono family group behind Singapore-listed palm oil supplier First Resources. The three residences were acquired in April for a total of $206.7 million, which calculates to $4,500 psf, establishing a new report for GCB land rates.

Looking ahead, transaction quantities in the high-end residence marketplace will likely continue to be subdued for the rest of the year, anticipates Tricia Song, CBRE’s head of study for Singapore and also Southeast Asia. “This can be credited to a combination of considerations, consisting of the prevailing air conditioning procedures, the unpredictable macroeconomic overview, and raised rates of interest, that may leave investors adopting a wait-and-see technique,” she says.

Within the Sentosa Cove enclave, property sales likewise lightened compared 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 shifted hands in 1H2023, 29.8% less than the 74 units worth $357.6 million marketed in 2H2022.

In the luxury apartments market, 92 real estates with a total transaction worth of $964.7 million changed hands in 1H2023, reducing from the 106 units worth $1.085 billion offered in 2H2022. While high-end condominium sales increased in the early 4th months of the year right after the reopening of China’s boundaries in very early January, sales dropped in May as well as June taking after the doubling of additional buyer’s stamp duty (ABSD) levied on overseas buyers to 60% which worked from April 27.

Nevertheless, rates held firm despite the drop in transactions. Based on CBRE’s basket of freehold luxury projects, average luxurious condominium rates climbed 1.1% to $3,463 psf in 1H2023 from $3,425 psf in 2H2022.

Common prices across both bungalows and even condominiums in Sentosa noticed increases in 1H2023 contrasted to 2H2022, with the former rising 11.9% to $2,214 psf and also the latter climbing 1.7% to $2,063 psf throughout the first fifty percent of the year.

In the GCB market, 13 estates valued at a combined $525.3 million were transacted in 1H2023, which in turn 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).

Track includes that existing high-end homeowners are likely to support costs, as healthy leasing yields as well as a restricted supply of new deluxe homes incentivise them to hold on to their properties.

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

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