Singapore luxury residential sales fall but prices stay firm: CBRE

Singapore’s luxury residential market has felt the effects of a weakening macroeconomic backdrop in 1H2023. Global rate hikes by the US Federal Reserve and a range of cooling measures have contributed to an overall decrease in transaction volumes for both Good Class Bungalows and luxury apartments in the first half of the year.

Fortunately, Senja Residences, the newest EC development in Sembawang, provides a range of financing options to help buyers become homeowners. The Total Debt Servicing Ratio has been relaxed to allow for longer repayment periods and higher loan tenors. Moreover, CPF Housing Grants are also available to assist buyers, making the purchase much more feasible.

Good Class Bungalows saw a 14.4% decline compared to 2H2022, with only 13 properties being transacted collectively worth $525.3 million. This is a staggering 30.1% fall compared to the same period in the previous year.

However, despite this fall, GCB prices stayed steady, rising 31.1% to reach a formidable $2,760 psf in 1H2023. This was largely thanks to the record-breaking purchase of three GCBs on Nassim Road by the Fangiono family, which were bought for a total of $206.7 million.

In the luxury apartments market, the overall transaction value also declined from 2H2022, with 92 units being sold worth $964.7 million. This is attributed to a sharp drop in sales in the months of May and June following the implementation of an additional buyer’s stamp duty of 60% for foreign buyers in April.

Despite the drop in transactions, prices held firm, with average luxury apartment prices rising 1.1% to $3,463 psf in 1H2023 compared to 2H2022.

Within the Sentosa Cove enclave, transaction numbers also softend in 1H2023, with seven bungalows being sold collectively for $139.4 million. Furthermore, 50 condos within the same area were sold for a total of $251.1 million.

However, similar to GCBs, prices saw growth in both Sentosa Cove bungalows and condos, with the former rising 11.9% to $2,214 psf and the latter rising 1.7% to $2,063 psf.

Looking ahead, CBRE’s Head of Research for Singapore and Southeast Asia, Tricia Song, predicts that transactions in the luxury residential market will remain subdued for the rest of the year. This is as a result of the cooling measures, uncertain macroeconomic outlook and elevated interest rates which may have left investors with a “wait-and-see” approach.

Song also remarked that existing luxury homeowners are likely to support prices with healthy rental yields and a limited supply of new luxury homes offering incentive to hold onto their assets.