Singapore luxury residential sales fall but prices stay firm: CBRE

CBRE highlights that GCB rates remained firm, increasing 31.1% compared to 2H2022 to get to $2,760 psf in 1H2023. The buildup was supported by a landmark transaction during the initial part of the year when a trio of GCBs on Nassim Road owned by Cuscaden Peak Investments were acquired by members of the Fangiono family group behind Singapore-listed palm oil manufacturer First Resources. The three residences were purchased in April for an overall of $206.7 million, which calculates to $4,500 psf, setting a new report for GCB land rates.

In the GCB market, 13 real estates worth a combined $525.3 million were settled in 1H2023, which is a 14.4% downturn from 2H2022 (18 GCBs worth $613.5 million), and a 30.1% autumn y-o-y from 1H2022 (29 GCBs worth $751.42 million).

The Hill @ One North condo

Singapore’s deluxe housing industry continued to soften in 1H2023 amidst aggressive rate increases by the US Federal Reserve and also a souring macroeconomic backdrop, according to CBRE in a latest research record. Deal volumes for both Good Class Bungalows (GCBs) as well as high-end apartments declined in the very first half of the year, matching movements in the general real estate industry.

“Comparable to 2022, 1H2023 continued to view GCB demand from recently naturalised people along with primary executives of conventional companies, while the current purchasing by digital market entrepreneurs last viewed in 2021 remained lacking amid the economic decline plus hard-hit tech field,” CBRE includes.

Within the Sentosa Cove enclave, property sales likewise softened contrasted to 2H2022. Seven Sentosa Cove bungalows worth $139.4 million were marketed in 1H2023, 32.8% less than the 10 bungalows worth $207.5 million transacted in 2H2022. For Sentosa Cove condominiums, 50 units amounting to $251.1 million switched hands in 1H2023, 29.8% lower than the 74 units worth $357.6 million marketed in 2H2022.

Nevertheless, costs held firm regardless of the decrease in purchases. Based upon CBRE’s basket of estate luxury plans, average luxury condominium costs rose 1.1% to $3,463 psf in 1H2023 from $3,425 psf in 2H2022.

Looking forward, transaction volumes in the luxury residential market will likely stay subdued for the remainder of the year, predicts Tricia Song, CBRE’s head of study for Singapore and also Southeast Asia. “This can be credited to a mix of considerations, including the dominating air conditioning steps, the uncertain macroeconomic overview, and raised interest rates, that might leave investors embracing a wait-and-see strategy,” she claims.

Average costs throughout both bungalows and also condos in Sentosa found increases in 1H2023 compared to 2H2022, with the past rising 11.9% to $2,214 psf and also the latter increasing 1.7% to $2,063 psf throughout the initial half of the year.

The Fangiono family in addition purchased one more GCB on Nassim Road in March for $88 million ($3,916 psf), the lone best GCB purchase 1H2023.

In the high-end houses market, 92 buildings with an overall transactions value of $964.7 million shifted hands in 1H2023, reducing from the 106 units worth $1.085 billion sold in 2H2022. While high-end flat sales increased in the first fourth months of the year after the resuming of China’s borders in very early January, sales fell in May as well as June taking after the doubling of additional buyer’s stamp duty (ABSD) imposed on foreign buyers to 60% that took effect from April 27.

Track includes that existing deluxe property owners are most likely to support costs, as healthy leasing yields and a limited supply of new high-end homes incentivise them to hang on to their properties.

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