Singapore luxury residential sales fall but prices stay firm: CBRE

CBRE highlights that GCB costs continued to be firm, climbing 31.1% compared to 2H2022 to reach $2,760 psf in 1H2023. The buildup was sustained by a spots transaction throughout the first 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 behind Singapore-listed palm oil supplier First Resources. The three homes were purchased in April for a total of $206.7 million, which works out to $4,500 psf, establishing a new record for GCB land rates.

The Fangiono family additionally acquired an additional GCB on Nassim Roadway in March for $88 million ($3,916 psf), the lone biggest GCB purchase 1H2023.

In the GCB market, 13 properties valued at a shared $525.3 million were negotiated in 1H2023, which 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).

Common prices throughout both bungalows and also condominiums in Sentosa saw rises in 1H2023 compared to 2H2022, with the past rising 11.9% to $2,214 psf and the latter rising 1.7% to $2,063 psf throughout the initial half of the year.

Singapore’s deluxe housing market continued to relax in 1H2023 in the middle of hostile rate increases by the US Federal Reserve and also a souring macroeconomic backdrop, according to CBRE in a latest study credit report. Deal volumes for both Good Class Bungalows (GCBs) and high-end condos declined in the first part of the year, mirroring activities in the general real estate industry.

“Similar to 2022, 1H2023 remained to view GCB demand from newly naturalised residents and even primary execs of classic services, while the active purchasing by digital economy business owners last viewed in 2021 remained missing amid the financial slump and even hard-hit technology field,” CBRE includes.

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Tune adds that existing high-end home owners are likely to support rates, as healthy leasing yields as well as a minimal supply of brand-new deluxe homes incentivise them to hang on to their properties.

Looking ahead, transaction volumes in the luxury residence market will likely remain subdued for the rest of the year, predicts Tricia Song, CBRE’s head of research for Singapore and also Southeast Asia. “This can be attributed to a combination of considerations, including the dominating cooling measures, the unsure macroeconomic overview, and elevated interest rates, that may leave investors adopting a wait-and-see technique,” she states.

Within the Sentosa Cove enclave, real estate sales likewise relaxed contrasted to 2H2022. Seven Sentosa Cove bungalows value $139.4 million were offered in 1H2023, 32.8% lower than the 10 bungalows worth $207.5 million negotiated in 2H2022. For Sentosa Cove condos, 50 units totaling up to $251.1 million switched hands in 1H2023, 29.8% lower than the 74 units worth $357.6 million offered in 2H2022.

In the high-end houses market, 92 buildings with an overall transactions worth of $964.7 million changed possessions in 1H2023, relieving from the 106 units worth $1.085 billion sold in 2H2022. While deluxe apartment sales increased in the early fourth months of the year right after the resuming of China’s borders in very early January, sales slipped in May and June taking after the increasing of additional buyer’s stamp duty (ABSD) levied on foreign shoppers to 60% which took effect from April 27.

Nonetheless, prices held firm regardless of the decrease in deals. Based on CBRE’s basket of estate luxury properties, common high-end apartment prices climbed 1.1% to $3,463 psf in 1H2023 from $3,425 psf in 2H2022.

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