Singapore luxury residential sales fall but prices stay firm: CBRE

CBRE highlights that GCB prices stayed firm, increasing 31.1% contrasted to 2H2022 to reach $2,760 psf in 1H2023. The progress was sustained by a spots transaction during the 1st half of the year when a trio of GCBs on Nassim Road owned by Cuscaden Peak Investments were purchased by associates of the Fangiono family group behind Singapore-listed palm oil producer First Resources. The 3 residences were bought in April for a total of $206.7 million, that turns out to $4,500 psf, establishing a brand-new report for GCB land rates.

In the GCB market, 13 properties valued at a collective $525.3 million were transacted in 1H2023, which in turn is a 14.4% downturn from 2H2022 (18 GCBs worth $613.5 million), and a 30.1% loss y-o-y from 1H2022 (29 GCBs worth $751.42 million).

Singapore’s deluxe residential market continued to relax in 1H2023 amid aggressive rate hikes by the United States Federal Reserve and a souring macroeconomic background, according to CBRE in a current research study record. Deal volumes for both Good Class Bungalows (GCBs) as well as luxury apartments decreased in the initial part of the year, matching activities in the overall real estate market.

Song adds that existing deluxe home owners are likely to sustain prices, as healthy rental yields and a minimal supply of brand-new deluxe houses incentivise them to hold on to their assets.

In the luxury residences market, 92 buildings with a complete transaction value of $964.7 million changed hands in 1H2023, reducing from the 106 units worth $1.085 billion offered in 2H2022. While high-end apartment sales ascended in the early 4th months of the year after the reopening of China’s borders in early January, sales fell in May and also June following the increasing of additional buyer’s stamp duty (ABSD) imposed on overseas buyers to 60% which took effect from April 27.

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“Comparable to 2022, 1H2023 remained to see GCB demand from freshly naturalised citizens and primary execs of conventional services, while the current buying by digital economy entrepreneurs last viewed in 2021 continued to be missing amid the financial slump plus hard-hit tech field,” CBRE adds.

Within the Sentosa Cove enclave, real property sales also lightened compared to 2H2022. 7 Sentosa Cove bungalows cost $139.4 million were offered in 1H2023, 32.8% less than the 10 bungalows worth $207.5 million negotiated in 2H2022. For Sentosa Cove condos, 50 units amounting to $251.1 million shifted hands in 1H2023, 29.8% less than the 74 units worth $357.6 million marketed in 2H2022.

Looking forward, deal volumes in the deluxe non commercial industry will likely stay controlled for the remainder of the year, predicts Tricia Song, CBRE’s head of research study for Singapore as well as Southeast Asia. “This can be credited to a combination of factors to consider, consisting of the dominating cooling steps, the unsure macroeconomic outlook, and raised rates of interest, that may leave investors adopting a wait-and-see technique,” she claims.

Standard prices throughout both bungalows and even apartments in Sentosa saw increases in 1H2023 contrasted to 2H2022, with the former rising 11.9% to $2,214 psf and the latter rising 1.7% to $2,063 psf throughout the initial half of the year.

Nonetheless, rates held firm despite the decrease in purchases. Based on CBRE’s basket of property luxury plans, common luxurious apartment prices climbed 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 lone best GCB deal in 1H2023.

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