Sales of Singapore Good Class Bungalows and Luxury Condominiums Fall, but Prices Remain Resilient

Although sales of luxury apartments and Good Class Bungalows (GCBs) in Singapore fell in the second half of 2023, prices held firm.

In 2H 2023, there were nine GCB transactions totalling $202.05 million, representing a 64.9% decline from the $575.27 million transacted across 14 GCBs in the preceding six months. The latest sales figure was also approximately one-third of the $613.45 million recorded in 2H 2022.

For the whole of 2023, only 23 GCBs were sold—the lowest annual volume since 1996. Total transaction value for the year reached $777.32 million. This was roughly half of the $1.37 billion recorded from 47 GCBs sold in 2022, and the lowest since 2015 when 33 GCBs changed hands for $714.78 million.

CBRE attributed the sales moderation to elevated interest rates, global economic uncertainty, and the ongoing anti-money laundering crackdown that commenced in August 2023.

The real estate consultancy noted that despite the drop in transaction volume, prices continued to rise. Although the average price of GCBs softened by 25.4% from $2,631 psf in 1H 2023 to $1,963 psf in 2H 2023, overall full-year prices were up 23.8% year-on-year.

CBRE indicated that asking rents for GCBs have also turned more "realistic", reflecting the Urban Redevelopment Authority (URA) landed rental index, which slipped 4.1% quarter-on-quarter in 4Q 2023, ending a 78% rally that began in 3Q 2020.

GCB rents surged significantly in 2022, driven by strong demand from ultra-high-net-worth foreigners willing to pay a premium for spacious homes suited to their lifestyles, but have since tapered off following the money laundering crackdown and softer market sentiment.

Recent revisions to the annual values of high-end residential properties have led to higher property taxes, which may prompt some owners to consider offloading their GCBs.

However, should interest rates begin to ease and the economy stage a robust recovery in 2H 2024, the price expectation gap between buyers and sellers could narrow, potentially spurring a rebound in GCB market activity.

Luxury Apartment Market

In the luxury apartment segment, transaction activity slowed in 2H 2023 following the doubling of Additional Buyer's Stamp Duty (ABSD) to 60% for foreign buyers.

Luxury apartments are defined as units located in the Core Central Region (CCR) with floor areas exceeding 2,000 sq ft and fetching prices of $2,500 psf and above.

In 2H 2023, 63 luxury apartments changed hands for $579.65 million, down from 92 units worth $964.67 million in the first half of the year.

For the full year of 2023, 155 transactions were completed with an aggregate value of $1.54 billion, below the 223 transactions totalling $2.18 billion in 2022, marking the lowest tally since 2020.

Nevertheless, sales registered a quarter-on-quarter uptick in 4Q 2023, buoyed by robust demand for Watten House. During its launch in November 2023, Watten House sold 102 units at an average price of $3,230 psf.

Supported by limited inventory, the average price of luxury apartments climbed 2.2% from $3,343 psf in 2022 to $3,417 psf in 2023.

The long-term outlook for luxury apartments remains bright, as Singapore's strong fundamentals as a premier business hub should continue to draw investors seeking a safe haven for their wealth.

Meanwhile, transaction volumes for Sentosa Cove properties also retreated in 2023 amid economic headwinds, rising interest rates, and cooling measures.

In 2H 2023, two Sentosa Cove bungalows were sold for $35.66 million, reflecting a 74.4% drop from the $139.39 million transacted across seven bungalows in 1H 2023.

In total, nine bungalows were sold in 2023 for $175.05 million, a 48.2% decline compared to 18 units worth $337.7 million in 2022, marking the lowest level since 2019.

Despite the dip in volume, prices held firm, with the average price rising 15.8% year-on-year to $2,470 psf in 2023.