Singapore Luxury Residential Prices Stable Despite Declining Transactions, Observes CBRE

Singapore – 4 September 2023 – Transaction volumes for GCBs and luxury apartments declined in H1, but prices are likely to remain stable, according to a CBRE H1 2023 report on the Singapore luxury residential market.

In the GCB market, transaction activity had begun slowing down as early as Q4 2022, and the trend persisted into H1 2023. Over the six-month period, 13 GCBs worth a collective S$525.27 million were transacted, representing a 30.1% y-o-y decline, and a 14.4% decline from the S$613.45 million across 18 GCBs in H2 2022. This is likely attributable to the interest rate hikes and a gloomy economic outlook. Average prices, however, have remained stable.

The luxury apartment market began H1 2023 differently, with sales growing in the beginning of the year following the re-opening of China’s borders. Sales consequently slumped after 27 April, when the ABSD imposed on foreign buyers doubled to 60%. Prices held firm despite lower transaction volumes. Based on CBRE Research’s basket of freehold luxury projects, average luxury apartment prices rose modestly by 1.1% to $3,463 psf in H1 2023, from $3,425 psf in H2 2022.

In Sentosa Cove, movements in transaction volumes and prices were largely similar as those observed on the Singapore mainland.

Tricia Song, CBRE Head of Research, Singapore and Southeast Asia, projected, “Transaction volumes in the Singapore luxury residential market are likely to remain subdued for the rest of the year. This can be attributed to a combination of considerations that might leave investors adopting a wait-and-see approach, including the prevailing cooling measures, the uncertain macroeconomic outlook, and elevated interest rates.”

“Existing owners are also likely to hold prices firm instead of feeling a pressure to dispose of their assets, because rental yields are expected to remain healthy, supported by a limited luxury home supply pipeline. Further, Singapore is widely considered a regional wealth hub, and luxury homes here - especially GCBs - are attractive status symbols. These will further incentivize owners to hold on to their prized assets”, Ms. Song added.

To read the full report, click here.