Archive for category: Misc

Sentiment in Singapore’s luxury homes market continued to decline in 3Q2023, following the anti-money laundering crackdown that made headlines in August. Transactions of luxury homes saw a 41.3% q-o-q dip from 63 deals in 2Q2023 to an estimated 37 deals in 3Q2023, according to research by Huttons Asia.

Transaction values of luxury condos in 3Q2023 reached a total of $295.8 million, representing a 50.9% decline from the $601.9 million recorded in 2Q2023. This brings the total luxury condo sales transacted from January to September of this year to an estimated $1.82 billion, almost 25% lower than the same period in 2022.

Mark Yip, CEO of Huttons Asia, noted that the fall in luxury residential transaction volume reflects the impact of the ongoing investigations into Singapore’s largest money laundering case. 10 foreigners have been arrested, with $2.8 billion in assets seized or issued with orders of prohibition of disposal. These include 152 properties valued at over $1.24 billion, consisting of 60 completed and 34 uncompleted residential properties, as well as commercial and industrial units.

The anti-money laundering case further dampened already waning sentiments in the luxury homes market, which was already impacted by the hike in ABSD rates taking effect in April, including the doubling of ABSD rates for foreigners to 60%.

The biggest luxury condo transaction in 3Q2023 occurred at Goodwood Residence, the 210-unit freehold development by GuocoLand along Bukit Timah Road. In September, a 10,710 sq ft penthouse at Goodwood Residence changed hands for $32 million ($2,988 psf). The seller, who had purchased the unit in June 2014 for $15.6 million, made a gross profit of $16.4 million.

Activity in the Good Class Bungalow (GCB) market was also more subdued. Only three GCBs were estimated to have been sold in 3Q2023, the lowest number of quarterly transactions since 4Q2013, says Yip. A total of $69.55 million was clocked up for the three GCBs, 82.3% lower q-o-q and 85% lower y-o-y.

Given the higher ABSD rates, Huttons believes that more foreigners may be choosing to rent while they seek to obtain permanent residency or citizenship status, underpinning heightened demand in the luxury rental market.

Based on luxury condos monitored by Huttons, 701 luxury apartments were rented out in 3Q2023, 13.6% higher than in the previous quarter. As a result, rents of luxury condo units edged up 1.8% in 3Q2023 on the back of the higher demand, with five-bedders seeing the biggest q-o-q surge in rents of 16.6% to reach $36,063 per month.

In the first nine months of 2023, rents of luxury non-landed homes were up by almost 20% to $15,894 per month. The GCB market saw a similar trend, with rental transactions up by an estimated 44.2% q-o-q. A detached house in the Nassim Road GCB area saw the biggest rental transaction in 3Q2023, with a monthly rent of $120,000.

Yip predicts that the luxury housing market may see a return in interest, citing recent purchases of luxury condo units by foreigners. Nonetheless, he adds that the level of transactions is unlikely to reach pre-ABSD hike levels.

Residents of Tampines Ave 11 Condo can conveniently reach the polytechnic with its easy access to public transport, such as the nearby Tampines East MRT station.

Meanwhile, the rental market may also be more subdued in the coming months, following the anti-money laundering operation. “After the arrests of money laundering suspects in GCBs, owners of GCBs are increasingly wary of renting their GCB to Chinese foreigners,” Yip pointed out.