Live in the CCR from Just $1.5M? The 'Luxury Homes' You Thought Were Out of Reach Are Lowering Their Entry Barriers

️ Catering to Local Buyers: Developers Shift Strategy as New Prime Condos Trend Towards “Upscale Without the Ultra-Luxury”

In Singapore’s property market, the Core Central Region (CCR) has long epitomised the pinnacle of luxury living—freehold tenures, sprawling layouts, and eye-watering price quantums, making it the top choice for foreign buyers and ultra-high-net-worth individuals (UHNWIs).

However, ever since the Additional Buyer’s Stamp Duty (ABSD) for foreign buyers was raised to 60%, this buyer segment has virtually vanished from the market. Faced with this drastic shift in demand, developers have had to recalibrate their project strategies, tailoring designs, unit layouts, and pricing towards local buyers. This has led recent prime launches to take on a new landscape: upscale, yet without the excessive opulence.

For a long time, CCR luxury homes were synonymous with large floor plates, high price quantums, and freehold tenures. Recent launches, however, paint an entirely different picture, with an influx of 99-year leasehold developments featuring compact layouts and far more accessible entry prices.

A prime example is River Green, which saw brisk sales in August. More than 70% of its units are one- and two-bedroom layouts, with starting prices of around $1.2 million and $1.5 million respectively—well below the $5 million-plus price tags typical of traditional CCR luxury homes.

Skye at Holland along Holland Road continues this trend, with compact units making up the vast majority. Its two-bedroom units range from just 581 to 743 sq ft, with starting prices from around $1.51 million.

Data reveals that from 2015 through the first 11 months of this year, new unit sizes in the CCR have shrunk noticeably. The proportion of large units measuring at least 1,076 sq ft plummeted from 39% to just 19%. Over the same period, the median size of new units narrowed from 861 sq ft to 732 sq ft.

In terms of overall quantum, the median price for new CCR units in the first 11 months of this year stood at $2.23 million—slightly lower than the $2.25 million seen in the Rest of Central Region (RCR). This highlights how product positioning in the CCR has quietly shifted.

The narrowing price gap between the CCR and RCR is partly driven by several new RCR launches located right on the CCR fringe this year. For instance, Zyon Grand and Promenade Peak along Zion Road are situated close to the CCR boundary, while One Marina Gardens in Marina South sits immediately adjacent to the Central Business District (CBD).

Developers must now strike a delicate balance between local buyers’ budgets and escalating land development costs. To achieve higher per-square-foot (psf) pricing while keeping the overall lump-sum quantum palatable, many developers have opted for more compact, space-efficient layouts—a primary strategy to navigate changing market dynamics.

Market analysts also attribute the shifting CCR product mix to tenure changes.

Historically, prime homes in the CCR were regarded as top-tier largely due to the dominance of freehold tenures. However, this structure has changed rapidly since the Government began releasing more 99-year leasehold sites in the CCR. Developer sales data shows that while only 35% of units sold in 2022 were 99-year leasehold, that figure surged to 82.3% in the first 11 months of this year, demonstrating a thorough reshaping of the CCR's product landscape.

This toning down of opulence has brought prime private residences closer to the purchasing power of local buyers. For instance, River Green recorded an 88% take-up rate during its launch weekend at an average price of around $3,130 psf, with approximately 98% of buyers being Singapore Citizens or Permanent Residents. Developer Wing Tai Holdings previously noted that following the ABSD hikes, developers can no longer rely on foreign buyers, making it imperative to craft competitive unit layouts with quantums tailored to local demand.

In the past, both foreign and local UHNWIs were the core target demographic for CCR luxury properties, placing high value on prestigious addresses, freehold tenure, and exclusivity. However, with ABSD raised to 60%, these foreign buyers have been sidelined, compelling developers to pivot and refocus on domestic purchasers.

In the near term, new launches in the CCR are expected to remain on this path of "high-end without ultra-luxury". Only if ABSD for foreign buyers is significantly eased in the future might developers once again look at supersizing layouts, acquiring more freehold sites, and returning to ultra-luxury positioning.

Nonetheless, new private properties in the Core Central Region remain primarily catered to higher-income local households.

Based on current household income distributions, only the top 20% of Singaporean households can afford a CCR private home, meaning that while the market has pivoted to locals, the buyer pool remains relatively selective.

Overall, the Core Central Region is entering a new market phase. Rather than relying on foreign wealth, developers are wooing local buyers through more accessible quantums, compact unit configurations, and space-efficient layouts. While this new normal allows more homebuyers to secure a foothold in prime districts, it also means that the expansive, ultra-luxurious trophy homes of the past will become increasingly rare in the foreseeable future.