Luxury resale condo market stalls in 2024 as demand from foreign buyers falls

SINGAPORE – Singapore’s luxury condominium market came to a standstill in 2024, with property agents reporting a limited pool of buyers, leaving them with numerous listings but few takers.

A search on online property portal PropertyGuru showed more than 200 luxury condo listings priced above $10 million in the Orchard area, with many repeated listings and often more than one agent marketing the same property.

The sharp drop in foreign buyer interest was attributed by analysts to the 60 per cent additional buyer’s stamp duty (ABSD) on foreigners imposed in April 2023, and a limited new supply of such properties in 2024.

The market’s slowdown is evident in the numbers: In 2024, only 21 luxury condo units in the core central region (CCR) changed hands at above $10 million, down from 36 such units in 2023 and 56 in 2022.

Back in 2021, there were 100 luxury condos resold, and in 2020, a penthouse unit at Wallich Residence fetched a record $62 million.

Meanwhile, the priciest resale transaction in 2024 was a 5,801 sq ft unit at Eden Residences Capitol which sold for $19.75 million, according to the Urban Redevelopment Authority’s (URA) Realis caveat database.

This marked a sharp decline from 2023, when the top transaction – a $32 million sale of a penthouse unit at Goodwood Residence – was reportedly made to a Singapore permanent resident (PR) of Chinese nationality.

Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said: “The decrease in (the number of) transactions can primarily be attributed to a decline in demand from foreign buyers, who have been significantly affected by the 60 per cent ABSD.”

PRs pay 5 per cent ABSD on their first property, while citizens face 20 per cent ABSD only on their second property.

Ms Sun also cited limited new supply as a possible reason for the stagnation.

“Last year, the number of new luxury homes released to the market was significantly limited, particularly due to the scarcity of launches in the CCR,” she said.

The fewer options available could have further reduced transaction volumes.

Property agents said they do not expect the market to shift any time soon.

Ms Nicole Teo, deputy branch associate director of OrangeTee & Tie, said: “Foreign buyers had always been the main group buying luxury condominiums, followed by PRs, and then the few Singaporeans. A Singaporean with $20 million to invest in a property would rather buy a good landed property than a condo.”

Purchases of landed homes in Singapore by foreigners – including Singapore PRs – are restricted. Such buyers have to obtain permission from the Land Dealings Approval Unit.

Ms Teo added: “Foreigners can’t blow that sum on a landed property (except in Sentosa), so the high-net-worth foreigner would spend it on a luxury condo instead – but that was before the hefty ABSD imposed on foreigners.”

Property agent Stefanie Wong of Singapore Realtors Inc said the luxury condo market remains dominated by investors, but it makes arranging viewings challenging.

“With tenants in place, arranging viewings can take weeks. Sometimes (it takes) three to six months, or even up to a year, to sell a unit,” said Ms Wong.

She is currently marketing two luxury units at The Ritz-Carlton Residences, one of which is a penthouse unit with a price tag of $39 million. The other unit is a four-bedder priced below valuation at $10.9 million.

Mr Alex Low of PropNex Realty, who specialises in Sentosa Cove homes, said sales in the exclusive enclave are now predominantly driven by Singaporean buyers. A smaller group of foreign buyers, exempt from the 60 per cent ABSD, also contribute to the market.

Buyers from the US, Iceland, Liechtenstein, Norway and Switzerland do not need to pay ABSD for their first residential home in Singapore.

In 2024, 132 condos were resold in Sentosa, with 62 per cent of transactions coming from The Residences at W Singapore Sentosa Cove. Analysts said the heightened activity could reflect a spillover from rising demand for luxury homes in the city fringe, where prices remain higher than those in Sentosa.

Mr Low said he has observed several listings for luxury condos in the Singapore mainland valued at above $10 million sitting on the market for several months.

“Owners of such high-value properties typically have strong holding power and are not in a rush to sell. However, the pool of high-net-worth investors is limited, especially since rental yields are not particularly attractive,” he said.

“Potential buyers also hesitate because these properties could be challenging to sell in the future.”

But Ms Sun points out that there are some bright spots.

Data from URA Realis showed a slight improvement in the median rents of non-landed properties (excluding executive condominiums) in the CCR, rising from $5.50 per sq ft per month (psf pm) from July to September 2024 to $5.57 in the last three months of 2024. However, rents remain below the $5.68 psf pm seen in the last three months of 2023, said Ms Sun.

She added that this slight improvement in the final quarter of 2024 could have been driven by tenants who have shifted from city fringe to prime areas, as rents in the CCR are still lower than they were a year ago.

“It is possible that some investors will continue to buy properties for rental investment as the rental recovery may continue this year,” said Ms Sun.