S’pore luxury condo sales pick up in Q2 as ultra-rich buyers help reverse 3 quarters of decline

SINGAPORE – Sales of luxury condominium units picked up in the second quarter of 2024 with the gradual return of the ultra-rich to Singapore after three quarters of decline, agents reported.

According to data analysed by Huttons Asia, luxury non-landed homes saw steady demand in the second quarter, with 57 units worth $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 the second quarter of 2023.

The total value of non-landed luxury homes was $482.5 million, up 26.2 per cent from the first quarter’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 $736.7 million in the first six months of 2024, up from $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 Mr Mark Yip, chief executive of Huttons Asia.

“The ultra-high-net-worth (UHNW) individuals are gradually returning to Singapore’s luxury property market in second-quarter 2024.”

Mr Alan Cheong, Savills Singapore executive director of research and consultancy, noted that there were 52 deals worth more than $10 million each in the second quarter of 2024.

The tally of 40 landed houses and 12 “high-end” apartments is on a par with the 53 transactions seen in the same period in 2023, Mr Cheong said.

“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 in 2023.”

It could also be that permanent residents are now entering the luxury property market, since they pay only 5 per cent in ABSD for their first residential property, Mr 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 the first half of 2024 was the sale of a 7,761 sq ft unit at mixed-use development Skywaters Residences. The 57th-floor penthouse unit was sold for $47.3 million or $6,100 per sq ft (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 Mr 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 more than $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 the first half of 2024, from 58 a year ago.

This came as median prices on the island moderated slightly to $1,801 psf in the second quarter, from $1,999 psf in the first quarter.

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 the first half of 2024.

The priciest transaction was for a 3,057 sq ft unit at The Ritz-Carlton Residences Singapore, Cairnhill, at $16.5 million or $5,397 psf in January.

The Business Times had earlier reported that the sale of a 33rd-floor unit at the freehold luxury development gave the seller $4.9 million in profit. It was also the first time since June 2023 that prices in the prime residential market crossed the $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, Mr Sandrasegeran noted. This group of buyers purchased 45 non-landed CCR properties in the second quarter, from 21 in the previous quarter.

It also makes for the highest number of CCR units purchased by foreigners since the second quarter of 2023, when 100 units were sold, he said.

But in the near future, Huttons’ Mr Yip reckons that the luxury non-landed private residential market may see some headwinds, despite the better performance in the second quarter.

“Increased checks on the source of wealth of UHNW individuals by the Singapore Government are 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, Mr Nicholas Keong, Knight Frank’s head of residential and private office, pointed out that the prime non-landed home market remains uncertain, hamstrung by cooling measures.

“Singaporean home buyers scouting out prospects in the prime areas have also become more selective in the search for an ideal home,” Mr Keong said.

“With the current limited demand in the high-end market segment, prices are likely to remain flat, between minus 1 per cent and 2 per cent for the whole year, as sellers who 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 the second half of 2024, Mr Yip said.

Mr Cheong from Savills believes that while the situation will be volatile over the next few quarters, the market may see a slight positive trend line.

Mr Sandrasegeran said: “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.”

THE BUSINESS TIMES