Singapore luxury residential sales fall but prices stay firm: CBRE
Standard prices throughout both bungalows and also condominiums in Sentosa noticed increases in 1H2023 contrasted to 2H2022, with the former rising 11.9% to $2,214 psf and the latter climbing 1.7% to $2,063 psf during the very first fifty percent of the year.
CBRE accentuate that GCB rates remained firm, increasing 31.1% compared to 2H2022 to reach $2,760 psf in 1H2023. The growth was supported by a spots deal throughout the 1st half of the year when a trio of GCBs on Nassim Road owned and operate by Cuscaden Peak Investments were bought by associates of the Fangiono family group behind Singapore-listed palm oil supplier First Resources. The 3 homes were bought in April for a total of $206.7 million, that works out to $4,500 psf, setting a new report for GCB land rates.
Song adds that existing deluxe homeowners are likely to support costs, as healthy rental returns and a limited supply of brand-new luxury houses incentivise them to hold on to their assets.
In the GCB market, 13 properties valued at a combined $525.3 million were transacted in 1H2023, which is a 14.4% downturn from 2H2022 (18 GCBs worth $613.5 million), and a 30.1% autumn y-o-y from 1H2022 (29 GCBs worth $751.42 million).
Within the Sentosa Cove territory, property sales also softened compared to 2H2022. Seven Sentosa Cove bungalows cost $139.4 million were offered in 1H2023, 32.8% lower than the 10 bungalows worth $207.5 million negotiated in 2H2022. For Sentosa Cove condominiums, 50 units amounting to $251.1 million switched hands in 1H2023, 29.8% less than the 74 units worth $357.6 million offered in 2H2022.
The Fangiono family group in addition got an additional GCB on Nassim Road in March for $88 million ($3,916 psf), the single largest GCB sell 1H2023.
In the high-end houses market, 92 buildings with a total transaction worth of $964.7 million changed possessions in 1H2023, alleviating from the 106 units worth $1.085 billion marketed in 2H2022. While luxury condo sales increased in the first 4th months of the year after the reopening of China’s boundaries in early January, sales fell in May and also June taking after the doubling of additional buyer’s stamp duty (ABSD) levied on international customers to 60% which worked from April 27.
Looking ahead, deal volumes in the luxury residence industry will likely remain subdued for the rest of the year, anticipates Tricia Song, CBRE’s head of study for Singapore as well as Southeast Asia. “This can be credited to a combination of considerations, including the prevailing air conditioning procedures, the unsure macroeconomic expectation, as well as elevated rates of interest, that could leave investors embracing a wait-and-see strategy,” she states.
“Similar to 2022, 1H2023 remained to view GCB interest from newly naturalised residents along with primary execs of traditional organizations, while the active buying by digital market business owners last observed in 2021 remained absent amidst the economic decline and even hard-hit technology market,” CBRE adds.
Nonetheless, rates held firm in spite of the drop in deals. Based on CBRE’s basket of estate luxury projects, standard high-end condominium costs rose 1.1% to $3,463 psf in 1H2023 from $3,425 psf in 2H2022.
Singapore’s luxury housing market continued to relax in 1H2023 amidst hostile rate increases by the United States Federal Reserve and also a souring macroeconomic backdrop, according to CBRE in a recent study credit report. Deal quantities for both Good Class Bungalows (GCBs) and luxury condos decreased in the first half of the year, mirroring activities in the general real estate market.