Singapore luxury residential sales fall but prices stay firm: CBRE

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Singapore’s luxury residential market saw a continued decline in the first half of 2023, due to the US Federal Reserve’s aggressive rate hikes and a struggling macroeconomic environment. According to CBRE’s research report, the number of Good Class Bungalows (GCBs) and luxury apartments transacted in the first half of the year both declined.

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In the GCB market, only 13 properties worth a collective $525.3 million were transacted in 1H2023, a 14.4% decrease from the 18 GCBs worth $613.5 million in 2H2022 and a 30.1% decrease from 1H2022 (29 GCBs worth $751.42 million).

Despite the drop in transaction numbers, GCB prices still managed to remain firm, rising by 31.1% in comparison to 2H2022 to reach $2,760 psf in 1H2023. This was largely bolstered by the multi-million dollar Fangiono family’s purchase of three Nassim Road GCBs for a total of $206.7 million ($4,500 psf) in April.

Conversely, the luxury apartments market saw fewer transactions in 1H2023, with 92 properties with a total transaction value of $964.7 million changing hands, a decrease from 2H2022’s 106 units worth $1.085 billion. This drop is largely due to the increase in Additional Buyer’s Stamp Duty (ABSD) on foreign buyers from April 27.

On the other hand, averages prices for luxury apartments held firm at $3,463 psf, 1.1% higher than 2H2022’s $3,425 psf. For Sentosa Cove bungalows and condos, average prices rose 11.9% to $2,214 psf and 1.7% to $2,063 psf respectively in 1H2023 when compared to 2H2022.

Looking into the future, CBRE’s Head of Research for Singapore and Southeast Asia, Tricia Song predicts that due to the prevailing cooling measures, uncertain macroeconomic outlook and elevated interest rates, transaction volumes in the luxury residential market are likely to stay subdued for the rest of the year, leaving investors with a wait-and-see attitude.

Despite this, Song also adds that existing luxury homeowners are likely to support prices due to the healthy rental yields and limited supply of new luxury housing.