Luxury Condo Market Activity Nearly Back Pre Cooling Measures Level Huttons Asia
Demand for luxury condos increased in the second quarter of 2024, leading to a rise in activity in the market, as noted by research from Huttons Asia. The Prestige Report, which tracks high-end residential properties, revealed that 57 luxury non-landed homes, defined as units in the Core Central Region with a size of over 2,000 sq ft priced at $5 million or above, were sold in the second quarter. This represented a 7.5% increase from the previous quarter.
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The total sales value of these homes was $482.5 million, a 26% jump from the $382.4 million recorded in the first quarter. The consultancy attributes this rise in sales to the gradual return of ultra-high-net-worth individuals (UHNWIs) to the market. CEO of Huttons Asia, Mark Yip, comments, “Activity in the luxury non-landed homes market is almost back to the pre-cooling measures days.”
The priciest sale in the luxury condo market for the second quarter was a penthouse unit at Skywaters Residences, a 190-unit mixed-use development located in the former AXA Tower in Tanjong Pagar. The 7,761 sq ft unit sold for $47.34 million, or $6,100 per sq ft, with the buyer being a foreigner whose nationality was not specified.
In terms of rentals, the high-end condo market saw a 12.5% increase in transactions in the second quarter, although rental rates remained relatively stable. Yip notes that while there has been an increase in demand, tenants remain cautious due to the current economic climate.
Despite the growth in luxury condo sales in the second quarter, Yip remains cautious about the market’s future, citing potential headwinds. He explains, “Increased checks on the source of wealth of UHNWIs by the Singapore government are causing some friction in the market.” As a result, some UHNWIs may turn to other wealth hubs such as Hong Kong or Dubai, which could lead to a decline in luxury condo deals in the second half of 2024.
In the Good Class Bungalow (GCB) market, eight units were sold for a total of $299.1 million in the second quarter. This represents a 152.6% surge in sales value from the previous quarter, when five GCBs were sold for $118.4 million. Yip attributes the increase in transaction value to several high-profile deals that took place in the second quarter. He adds, “This could be due to a narrowing in price expectations between sellers and buyers.”
The largest GCB deal in terms of absolute quantum was the sale of a property in the Bin Tong Park GCB area, which was reported to have sold for $84 million in April. The buyer is said to be the daughter of a Chinese steel and nickel magnate. The second-largest GCB deal was a property at Jervois Hill that was sold for $58 million to a family member related to one of the largest conglomerates in Indonesia.
In the rental market, most GCBs leased out in the second quarter were priced below $30,000 per month, according to Huttons’ report. The highest rental transaction was for a property at Queen Astrid Park, which was leased out for $75,000 per month.