Singapore luxury residential sales fall but prices stay firm: CBRE

CBRE accentuate that GCB prices stayed firm, climbing 31.1% compared to 2H2022 to get to $2,760 psf in 1H2023. The progress was sustained by a spots deal during the first 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 3 houses were bought in April for a total of $206.7 million, which calculates to $4,500 psf, setting a brand-new report for GCB land rates.

In the luxury houses market, 92 properties with a total transaction worth of $964.7 million changed possessions in 1H2023, reducing from the 106 units worth $1.085 billion marketed in 2H2022. While high-end condo sales ascended in the first 4th months of the year right 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 buyers to 60% which worked from April 27.

Common prices throughout both bungalows and also apartments in Sentosa saw increases 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 during the initial half of the year.

Nonetheless, rates held firm in spite of the drop in transactions. Based on CBRE’s basket of estate luxury projects, common high-end condominium prices increased 1.1% to $3,463 psf in 1H2023 from $3,425 psf in 2H2022.

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

“Similar to 2022, 1H2023 continued to see GCB interest from recently naturalised citizens along with primary execs of conventional organizations, while the active buying by digital market entrepreneurs last seen in 2021 continued to be absent amid the financial slump plus hard-hit technology market,” CBRE adds.

Cape Royale condo floor plan

Looking ahead, purchase volumes in the luxury residence marketplace will likely remain controlled for the rest of the year, predicts Tricia Song, CBRE’s head of research study for Singapore and Southeast Asia. “This can be credited to a combination of considerations, consisting of the prevailing air conditioning procedures, the uncertain macroeconomic overview, as well as raised interest rates, that might leave investors embracing a wait-and-see method,” she states.

In the GCB market, 13 properties worth a shared $525.3 million were negotiated 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).

Within the Sentosa Cove territory, real estate sales likewise lightened contrasted to 2H2022. 7 Sentosa Cove bungalows cost $139.4 million were sold in 1H2023, 32.8% lower than the 10 bungalows worth $207.5 million negotiated in 2H2022. For Sentosa Cove condos, 50 units amounting to $251.1 million switched hands in 1H2023, 29.8% lower than the 74 units worth $357.6 million sold in 2H2022.

Song adds that existing high-end homeowners are most likely to support rates, as healthy rental yields and a minimal supply of new high-end houses incentivise them to hang on to their properties.

Singapore’s deluxe residential industry continued to relax in 1H2023 in the middle of aggressive price hikes by the United States Federal Reserve and also a souring macroeconomic background, according to CBRE in a current study record. Deal volumes for both Good Class Bungalows (GCBs) and high-end condos declined in the very first part of the year, mirroring movements in the overall real estate industry.