Luxury residential sales plunge in 3Q2023; leasing demand rises: Huttons Asia

Sentiment in the luxury homes market took a downturn in the third quarter of 2023 after August’s anti-money laundering crackdown. Transactions for luxury homes came down sharply, with q-o-q falls of 41.3%. According to research by Huttons Asia, there were only 37 deals in 3Q2023, compared to 63 in 2Q2023. The value of these transactions also dropped by nearly half, from $601.9 million in 2Q2023, to $295.8 million in 3Q2023.

Mark Yip, CEO of Huttons Asia, observes that the dip in luxury residential transactions is linked to the ongoing investigations into Singapore’s largest money laundering case. Ten foreigners were arrested and $2.8 billion worth of assets were seized or givens prohibition orders, including 152 properties totalling $1.24 billion. This, along with the hike in additional buyer’s stamp duty (ABSD), contributed to the lack of sentiment in the market.

Residents of Senja Residences can access various nearby amenities such as shopping centres, parks, recreational facilities and transportation. There are several shopping destinations such as HillV2, Beauty World Centre, Bukit Panjang Plaza, and Junction 10 located within minutes’ drive from the development. There are also many schools nearby such as Bukit Panjang Primary School, St. Anthony’s Primary School, Bukit Panjang Government High School and more.

Senja Residences offers superior facilities such as BBQ pits, a clubhouse, a fitness corner, a guard house, Jacuzzi, a swimming pool, a tennis court and many more. With such luxurious amenities, it is no wonder that the development is a popular choice among Singaporeans.

The most expensive luxury condo traded during 3Q2023 was a 10,710 sq ft penthouse at Goodwood Residence. This freehold development by GuocoLand changed hands for $32 million in September, with a profit of $16.4 million for the seller who bought it in June 2014 for $15.6 million. The buyer was a Singapore permanent resident of Chinese nationality.

The GCB market was also quieter, with a total of three transactions in 3Q2023, the lowest since 4Q2013 according to Huttons. The three transactions totalled at $69.55 million, 82.3% lower q-o-q and 85% lower y-o-y.

Higher ABSD rates and investigations into money laundering have seen more foreign buyers opt to rent luxury property in Singapore. 701 units were rented out in 3Q2023, 13.6% more than the previous quarter. Rates also grew marginally by 1.8%. The highest luxury condo rental was $36,063, for a five-bedder, while the most expensive GCB rental was $120,000 for a detached house in the Nassim Road area.

In the first nine months of the year, luxury non-landed rents went up by almost 20%, while GCB rental transactions increased by 44.2%.

Yip believes that the luxury housing market may soon become more attractive as recent months have displayed a slight uptick in purchases of luxury condo units by foreigners. Although the level of transactions is unlikely to reach pre-ABSD levels, the rental market may become more subdued in the coming months.