Singapore luxury residential sales fall but prices stay firm: CBRE

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Singapore’s luxury residential market saw a softening in 1H2023 amidst a souring macroeconomic backdrop and increasing rate hikes from the US Federal Reserve. Transaction volumes for both Good Class Bungalows (GCBs) and luxury apartments decreased in comparison to previous years.

The GCB market was marked by a 14.4% decline to 13 properties worth $525.3 million in 1H2023, from 18 GCBs worth $613.5 million in 2H2022. In addition, y-o-y figures show a significant 30.1% fall from 1H2022, with 29 GCBs worth $751.42 million sold. Prices, however, remained firm even as transaction volumes went down, rising 31.1% as compared to 2H2022 to reach $2,760 psf in 1H2023.

This was no doubt aided by a record-setting deal in April where the Fangiono family behind Singapore-listed palm oil producer First Resources bought a trio of GCBs on Nassim Road worth a total of $206.7 million ($4,500 psf). They had also acquired another GCB at an eye-watering $88 million ($3,916 psf) in March, making it the single largest GCB sale of 1H2023.

In the luxury apartment sector, 92 properties worth $964.7 million were transacted in 1H2023. This is a reduction from the 106 units worth $1.085 billion sold in 2H2022. Despite this drop, average luxury apartment prices surprisingly stayed steady, increasing 1.1% to $3,463 psf in 1H2023.

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Sentosa Cove saw a similar story, as seven bungalows worth $139.4 million changed hands in 1H2023 (32.8% lower than the 10 bungalows worth $207.5 million transacted in 2H2022). For Sentosa Cove condos, 50 units amounting to $251.1 million were sold in 1H2023 (29.8% lower than the 74 units worth $357.6 million sold in 2H2022). Nonetheless, average prices went up for bungalows (11.9% to $2,214 psf) and condos (1.7% to $2,063 psf).

Looking ahead, a wait-and-see approach among investors is likely in the luxury residential market. This is due to cooling measures, the uncertain macroeconomic outlook, and elevated interest rates. However, existing luxury homeowners are expected to maintain prices, attribute to favourable rental yields and a limited supply of new luxury homes in the market.