Who Is Still Buying Luxury Homes Amid ABSD Hikes? Local HNWIs and Family Offices Prop Up the Market

Luxury Home Transaction Value Defies Trends to Reach S$1.24B in 2H 2024, Signalling Market Recovery

According to the 2H 2024 Luxury Homes Report released on 24 March, although luxury residential transaction volumes fell year-on-year, overall transaction value rose against the trend, reflecting that economic stabilisation and interest rate cuts have injected fresh momentum into the prime residential market.

Transaction Volume Dips 16.1%, but Transaction Value Climbs 10.8%

The report noted that 52 luxury residential units (including Good Class Bungalows and non-landed luxury homes) were transacted in 2H 2024, down 16.1% from the 62 units in the first half; however, total transaction value over the same period grew by 10.8% to reach S$1.24 billion.

Luxury homes are defined as Singapore private residential properties located in the Core Central Region (CCR) valued at S$10 million and above, including Good Class Bungalows (GCBs).

Good Class Bungalows Lead Luxury Market with Record Prices

A total of 18 GCBs were transacted in the second half of the year, generating a total sales value of S$780.6 million. For the full year, GCB transaction value surged 126.6% year-on-year to S$1.14 billion.

The most notable transaction was a GCB located at Tanglin Hill, which changed hands for a staggering S$93.9 million, setting a new record psf price of S$6,197 per sq ft.

Non-Landed Luxury Market Softens, but Orchard Road Projects Retain Appeal

Only 16 non-landed luxury units were transacted, amounting to S$216.9 million in sales value—a 19% drop year-on-year.

Prime private residential developments in Orchard Road, such as Ardmore Park and Park Nova, continued to retain their appeal.

Foreign Buyer Demand Remains Muted, Local Buyers Dominate Market

The number of luxury units transacted by foreign buyers ticked up slightly from 10 to 11 units, but total transaction value fell to S$166.6 million (down from S$171.7 million in the preceding period).

The hike in Additional Buyer's Stamp Duty (ABSD) to 60% has significantly curtailed foreign buying power.

The luxury market was primarily underpinned by Singapore Citizens and Permanent Residents.

Outlook: Sentiment Rebounds, GCBs May See Transaction Peak

The report highlighted that with the recovery in economic activity and returning investor confidence, particularly for Good Class Bungalows (GCBs), transaction volumes are poised to pick up this year, providing further upward support for prices.

For non-landed luxury homes, while transaction volumes may remain subdued, prices could see modest growth if the broader new private home market stays buoyant.

Additionally, the report noted that an increasing number of family offices are setting up in Singapore, alongside a rising Permanent Resident population.

Demand for prime homes from these emerging high-net-worth individuals is likely to serve as a key pillar of support for Singapore's luxury property market in the coming years.