Prices of Singapore luxury apartments, GCBs and Singapore GCBs are stable despite the decline in sales volume
CBRE stated that the recent revisions in annual values could cause owners to face higher property tax payments, leading them to consider selling their GCBs.
However, the report said that if interest rates start to ease and if the economy recovers strongly by H2 2024 there could be a narrowing of the price difference between buyers & sellers and a resurgence in GCB trading.
The number of transactions in the luxury apartments segment fell in H2 2020 after the Additional Buyers’ Stamp Duty, which is levied to foreigners, was doubled.
CBRE defines Luxury Apartments as being apartments larger than 2,000 Square Feet and selling for S$2,500 Per Square Foot and Above.
In H2 2020, 63 apartments were sold for a total value of S$579.65million. This is a decrease from the 92 apartments that were recorded in the first half of the year. These units had a combined value of S$964.67million.
CBRE reports that there were 155 deals worth S$1.54B in 2023. This was down from 223 transactions worth S$2.18B in 2022. The lowest year since 2010 is 2023.
Watten House launched in November 2018 and sold 102 homes at an annual average price of S$3,230.
The transaction volumes for Good Class Bungalows GCBs (luxury apartments) and Luxury Apartments decreased in the second halves of 2023. Prices, however, remained steady.
Nine GCB transactions totaling S$202.05m in H22023 were recorded, a decline of 64.9% compared the S$575.27m generated by 14 GCBs transactions during the previous six months. The S$202.05m sales figure in H2 was about one-third of the S$613.45m transacted last year.
CBRE reported that 23 GCBs, the lowest total since 1996, were sold in 2023. CBRE revealed that total transaction value for 2018 was S$777.32 millions. CBRE stated that total transaction value in 2015 was S$777.32million, about half the S$1.37billion reached in 2022.
The increase in interest rate, global economic uncertainty, as well as the ongoing money laundering crackdown, which began in August 2023.
Property consultancy firm notes that despite lower transactions, prices are still increasing. The average GCB price dropped by 25.4%, from S$2,631 psf during H1-2023 to S$1,963 psf during H2; however, the overall price grew 24.8% over the course of the year.
CBRE also said that asking for rents from GCBs is now more “realistic”, a trend that mirrors the Urban Redevelopment Authority landed index. It fell 4.1 % quarter on quarter during Q4 2023.
CBRE noted that GCB Rents surged 2022 on the backs of higher demand for ultra-high income foreigners willing and able to pay a high premium to rent a larger residence to accommodate. However, the trend has slowed substantially since the money launderette crackdowns and the general market slowdown.
CBRE Research’s freehold luxury project basket shows that the average price of a luxury apartment will increase by 2.2 percent to S$3,417 in 2023 compared to S$3,343 in 2022. This rise is due in part because there are fewer premium properties.
Singapore is a strong business hub, and its fundamentals should continue drawing investors looking to secure their wealth.
Sentosa Cove also saw a decrease in transaction volume due to the weak economy, high interest rates and cooling measures.
Sentosa Cove bungalows in H2 (2023) were worth S$35.66million, down 74.4percent from H1 when seven bungalows exchanged hands for S$139.39million.
CBRE data show that nine bungalows with a value of S$175.05million sold in Singapore in 2023. This is down 48.2 percent from 18 bungalows selling for S$337.7million in 2022. And it’s the lowest amount since 2019.
The prices increased by 15.8% per year, to S$2,47/sqft in 2023.
