As sales volume decreases, prices of Singapore GCBs and luxury apartments remain unchanged.
In Q4 2023 however, sales increased quarter-on-quarter, thanks to healthy demand from the new project launch at Watten House. It sold 102 apartments at an average cost of S$3,230/sqft during its launch last November.
CBRE Research’s basket of luxury freehold developments shows that average luxury apartment price will rise 2.2 per cent in 2023 to S$3,417/sqft from S$3,343/sqft in 2022. Limited premium stock is a major factor.
Singapore’s strength as a hub of business should continue attracting investors looking for safe havens to park their money.
Sentosa Cove recorded a lower volume of transactions last year as a result of the economic downturn, increased interest rates, and cooling measure.
Sentosa Cove bungalows sold for S$35.66M in H2-2023 are down 74.4% from the S$139.39M of H1, which was S$7 bungalows.
CBRE’s data indicates that in 2023 nine bungalows totaling S$175.05million were sold. This is a decrease by 48.2 percent from S$337.7million across 18 bungalows of 2022. The lowest level in years.
Prices increased 15.8% annually to S$2,47 psf by 2023 despite lower sales volumes.
The second half of the year 2023 saw a decrease in transaction volume for Good Class Bungalows, luxury apartments. However, prices remained unchanged.
Nine GCBs worth S$202.05m were transacted in H22023. That’s a drop of 64.9% compared with the S$575.27m from 14 GCBs in the prior six-month time period. The S$202.05 million figure for H2 is about a third less than the S$613.45 Million transacted by 14 GCB transactions in the previous six-month period.
Twenty-three GCBs have been sold for 2023. This is the lowest amount since 1996. CBRE announced that the total value of transactions in 2023 was S$777.32. CBRE reported that this was less than half of the S$1.37 bn achieved in 2020, when 47 GCBs had been sold. It is also the lowest amount since 2015 (S$714.78 mn) across 33 GCBCs.
The rise in interest rates has caused a slowdown in the sale of products. Global economic uncertainty and the ongoing money-laundering crackdown have also contributed to this.
The property consulting firm reported that despite the reduced transaction volume, prices were still growing. Although the average GCB was down by 25.4 percent from S$2,631 psf per square foot in H1 of 2023 to S$1,963 psf per H2, for the year overall, prices grew by 23.8 percent from S$1,952 psf per 2022 to S$2,417 psf per 2022.
CBRE reported that asking rents on GCBs has also become more “realistic”. The Urban Redevelopment Authority landed-rental index dropped by 4.1 per cent in the fourth quarter of 2023 after a 78.7 per cent increase since Q3 2020.
CBRE reported that GCB rental rates surged by 2022 as a result of a greater demand from ultra high-net-worth individuals who would pay a premium in order to rent a residence large enough to accommodate their lifestyles. But this trend has slowed since the money laundering crackdown, and the general sluggishness in the housing market.
CBRE reported that the recent revisions to annual values for properties of high value could lead to higher property taxes for owners and possibly cause some to sell GCBs.
It also added that if rates start to ease, and the economic recovery is strong in H2 2024 then the price gap could narrow between buyers and vendors, and GCB Market activity could pick-up.
In H2 of 2023, transactions for luxury apartments fell after the additional Buyer’s Stamp duty levied by foreigners doubled to 60%.
CBRE defines a luxury apartment as one that is larger than 2,050 square feet in the Core Central Region and has a price of S$2,500 and more per square foot.
In the second half of 2023, there were 63 luxury apartments worth S$579.65m. This was down from the 92 luxury units that changed hands the preceding year with a value S$964.67m.
CBRE stated that the total number of transactions in 2023 was 155, worth S$1.54bn, down from 223, worth S$2.18bn in 2022. It is the lowest figure since 2020.
