Singapore luxury residential sales fall but prices stay firm: CBRE

In midst of sharp hikes in lending rates by the US Federal Reserve and a devastating macroeconomic backdrop, Luxurious residential property market in Singapore continuously head downward in 1H2K23, according to a recent research report compiled by CBRE. Both Good Class Bungalows (GCBs) and luxury apartments Transaction volumes reduced in the first half of the year, mirroring the same downward trend in the general property market. A collective of $525.3 million from 13 Good Class Bungalow were transacted in 1H2K23, which is a 14.4% reduction from 2H2K22 (18 Good Class Bungalow worth $613.5 million), and a 30.1% fall y-o-y from 1H2K22 (29 Good Class Bungalow worth $751.42 million). Good Class Bungalow prices notably hold on strongly to the price generally, rising 31.1% in comparison to 2H2K22 to reach $2,760 psf in 1H2K23. The growth was fueled by an indicator transaction during the first half of the year when members of the Fangiono family behind Singapore-listed palm oil producer First Resources purchased Cuscaden Peak Investments’s trio of GCBs on Nassim Road. The three houses were purchased in April for a total of $206.7 million, which works out to $4,500 psf, setting a new record for GCB land rates. The Fangiono family also invested in another Nassim Road Good Class Bungalow in March for $88 million ($3,916 psf), the single largest Good Class Bungalow transaction in 1H2K23. “Similar to 2K22, 1H2K23 continued to see Good Class Bungalow demand from newly converted citizens and key executives of traditional businesses, while the active buying by digital economy entrepreneurs last seen in 2K21 remained absent amid the economic slump turn and rock bottom tech sector,” CBRE adds. A total transaction value of $964.7 million exchanged hands in 1H2K23 In the high-net worth segment with 92 properties, softening from the 106 units worth $1.085 billion sold in 2H2K22. Sales volume declined in May and June following the doubling of additional buyer’s stamp duty (ABSD) levied on foreign buyers to sixty percent which was implemented with effect from April 27 despite luxury apartment sales rose in the first fourth months of the year after the China borders reopen in early January. Residential property prices of the luxury segment remained stable despite the volume of transactions declined. Based on CBRE’s wide spectrum of luxurious freehold development, average luxury apartment prices rose 1.1% to $3,463 psf in 1H2K23 from $3,425 psf in 2H2K22. Transaction volume Within the Sentosa Cove enclave also ease in comparison to 2H2K22. In 1H2K23, Seven Sentosa Cove bungalows worth $139.4 million were sold, thirty-two percent lower than the 10 bungalows worth $207.5 million exchanged hands in 2H2K22. For Sentosa Cove condos, 50 units amounting to $251.1 million changed hands in 1H2K23, 29.8% lower than the 74 units worth $357.6 million sold in 2H2K22. both bungalows and condos in Sentosa average prices saw an increase trend in 1H2K23 compared to 2H2K22, with the former rising 11.9% to $2,214 psf and the latter rising 1.7% to $2,063 psf during the first half of the year.

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