SINGAPORE – Sales of both luxury condominiums and good class bungalows (GCBs) waned in the fourth quarter of 2022 as the uber wealthy held back amid concerns that aggressive rate hikes by the US Federal Reserve would tip the United States into recession.
According to Huttons Asia’s latest report on the luxury market released on Monday, 73 non-landed luxury homes were sold in the fourth quarter, down 33.6 per cent from the previous quarter.
Based on caveats lodged, the total value of non-landed luxury homes was $684 million.
The latest quarterly data brought total transactions in the luxury non-landed market for the full year to 359, which was 19.1 per cent lower than that of 2021.
The total quantum invested for 2022 stood at $3.2 billion, down 28 per cent from the previous year.
The top three selling luxury condominium projects in 2022 in terms of price were Les Maisons Nassim, Tomlinson Heights and Le Nouvel Ardmore. Units at these projects reached the highest per square foot (psf) prices of $6,057, $4,645 and S$5,800, respectively.
The top foreign nationalities buying luxury properties were people from China, the US, Indonesia and Malaysia.
Only six bungalows were sold in the GCB areas in the fourth quarter of 2022, for a total value of $217.5 million – down 53.1 per cent from the previous quarter, and 45.9 per cent lower on a year-on-year basis.
Huttons said concerns about the US going into recession prompted some non-landed luxury buyers to hold back from purchases. It also said that GCB buyers were “holding back unless a very rare GCB plot comes along”.
Sellers, on the other hand, appeared to be asking for higher prices, said Huttons, which could have led to the lower GCB sales in the fourth quarter of 2022.
For the full year, Huttons estimated that a total of 48 GCBs were sold, representing just half the volume of transactions in 2021. The total quantum is estimated to be $1.4 billion, which is 51.6 per cent lower than 2021’s transacted value.
Leading the deals for 2022 was a GCB in Chancery Lane that was reportedly bought by Filipino billionaire Andrew Tan’s daughter-in-law, Ms Kelsey Cheng Tan, for $66.1 million. This marked the highest price paid for a GCB in the Bukit Tunggal GCB area on both a quantum and a psf-on-land basis, said Huttons.
Citing data from URA Realis, the agency noted that the highest rent achieved for a GCB in 2022 was $150,000 in the Dalvey Estate and Fourth/Sixth Avenue GCB area. Rents in the GCB areas appeared to have hit a plateau at this level as fewer GCBs were rented out for record levels in the fourth quarter of 2022, it added.
Despite the decline in luxury property transactions over the fourth quarter, Huttons sees the market benefiting from the lifting of border measures by China this year.
“This could be the year when the luxury market sees more high-profile deals with the return of super wealthy Chinese,” said the agency, highlighting an increase in inquiries and purchases by Chinese buyers in January 2023.
It added that recent purchases of luxury properties by Chinese buyers might not have been fully reflected in caveats as it is not compulsory to lodge one, and some of these deals could have used different deal structures or been bought under a non-China passport.
“The super wealthy are looking at large-format units for their own stay. There is limited supply of large-format units in the market,” observed Huttons.
It expected the GCB market to remain in the normalised range of 40 to 50 transactions in 2023, with some demand possibly spilling over to the locale of Wilkinson Road, Branksome Road and Goodman Road in District 15, where large land plots are available.
In Huttons’ view, sellers are holding out for their ideal price, while some would-be buyers might be waiting for their citizenship before buying a GCB.
THE BUSINESS TIMES
