SALES for luxury condominiums picked up in the second quarter of 2024 with the gradual return of the ultra-rich in Singapore after three quarters of decline, agents reported.
According to data analysed by Huttons Asia, luxury non-landed homes saw steady demand in Q2, with 57 units worth S$5 million each or more changing hands. While this was 7.5 per cent higher than the previous quarter, it was still 9.5 per cent lower than Q2 2023.
The total value of non-landed luxury homes was S$482.5 million, up 26.2 per cent from Q1’s S$382.4 million.
A Knight Frank report on prime residential property similarly indicated that the sales value of luxury non-landed homes rose 28.2 per cent to S$736.7 million in the first six months of 2024, up from S$574.7 million in the year-ago period.
“It is worth noting that activities in the luxury non-landed homes market are almost back to pre-cooling measures days,” said Mark Yip, CEO of Huttons Asia. “The ultra-high-net-worth (UHNW) individuals are gradually returning to Singapore’s luxury property market in Q2 2024.”
Alan Cheong, Savills Singapore executive director of research and consultancy, noted that there were 52 deals worth more than S$10 million each in Q2 this year.
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The tally of 40 landed houses and 12 “high-end” apartments is on a par with the 53 transactions seen in the same period last year, said Cheong. “It may suggest that the buying sentiment has gradually returned to the level before the negative impact caused by the latest increase in Additional Buyer’s Stamp Duty (ABSD) rates, and also in the aftermath of the anti-money laundering investigations that began last year.”
It could also be that permanent residents are now entering the luxury property market, since they only pay 5 per cent in ABSD for their first residential property, Cheong said.
Knight Frank pointed to buyers who continued to seek “family-sized, ready-to-move-in units” primarily for their own stay, rather than for investment purposes. By Knight Frank’s count, transaction volume increased to 98 in the first half of 2024, from 72 the year before.
Singapore Realtors Inc (SRI) noted that the top luxury condo deal in H1 2024 was the sale of a 7,761 square feet (sq ft) unit at mixed-use development Skywaters Residences. The 57th-floor penthouse unit was sold for S$47.3 million or S$6,100 per square foot (psf) in May, marking a record-high price for a 99-year leasehold property in psf terms.
“(The unit) was purchased by a foreign buyer, highlighting the underlying interest from affluent international purchasers in Singapore’s luxury real estate market,” said Mohan Sandrasegeran, SRI’s head of research and data analytics.
Other newly launched luxury developments in Singapore’s prime Core Central Region (CCR) with transactions of over S$10 million include 32 Gilstead in Novena and Watten House in Bukit Timah.
There was also a surge in property sales in Sentosa Cove, part of the CCR, with 101 transactions in H1 2024, from 58 a year ago. This came as median prices on the island moderated slightly to S$1,801 psf in Q2, from S$1,999 psf in Q1.
In the resale market, SRI’s data indicated that there were at least nine non-landed private home deals worth S$10 million each or more in H1 2024.
The priciest transaction was for a 3,057 sq ft unit at The Ritz-Carlton Residences Singapore, Cairnhill, at S$16.5 million or S$5,397 psf in January.
The Business Times had earlier reported that the sale of the 33rd-floor unit at the freehold luxury development gave the seller S$4.9 million in profit. It was also the first time since June 2023 that prices in the prime residential market crossed the S$5,000 psf mark.
The increased activity in the luxury real estate market follows a “modest” rise in foreign buyers for homes in the CCR, Sandrasegeran noted. This group of buyers purchased 45 non-landed CCR properties in Q2, from 21 in the previous quarter.
It also makes for the highest number of CCR units purchased by foreigners since Q2 2023, when 100 units were sold, said Sandrasegeran.
In the near future, however, Huttons’ Yip reckons that the luxury non-landed private residential market may see some headwinds, despite the better performance in Q2.
“Increased checks on the source of wealth of UHNW individuals by the Singapore government is increasing friction in the market,” he said. “Some are rethinking their plans to move to Singapore, and might choose Hong Kong or Dubai.”
Even with the recent pickup in transactions, Knight Frank head of residential and private office Nicholas Keong pointed out that the prime non-landed home market remains uncertain, hamstrung by cooling measures.
“Singaporean homebuyers scouting out prospects in the prime areas have also become more selective in the search for an ideal home,” said Keong.
“With the current limited demand in the high-end market segment, prices are likely to remain flat, between -1 and 2 per cent for the whole year, as sellers that are under pressure to sell in the resale market could adjust expectations down to prevailing market levels.”
Transactions in the luxury non-landed homes market may end up lower in H2 2024, said Yip.
Cheong from Savills believes that while the future will be volatile over the next few quarters, the market may see a slight positive trendline.
“The CCR’s premium properties, bolstered by their strategic locations and exclusive amenities, are expected to maintain their attractiveness to both local and international buyers,” added Sandrasegeran.
