The non-landed luxury real estate market increased in the first quarter of 2023 according to a study report from Huttons Asia. A total of 84 luxury non-landed properties were sold in the 1Q2023 period. The figure is 15.1% higher than the prior quarter. Based on cautions, the total value of luxury homes that were not landed that were sold totalled $740.6 millions, 8.3% higher q-o-q.
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The rise that has been seen in the luxury non-landed real estate market could result from the return of wealthy Chinese buyers following China’s ease of border control on January 8th, says Huttons Asia.
The return of super-rich Chinese, Klimt Cairnhill -the freehold condominium with 138 units of Low Keng Huat — was sold to 20 foreigners in the 1Q2023 period. “One of the main reasons the Chinese were so keen to Klimt Cairnhill was the availability of large-format units with of at least 2,000 sq feet,” says Huttons.
The three luxury condo developments which saw the largest transactions in the first quarter of 2023 include Les Maisons Nassim, Klimt Cairnill and Nassim Park Residences. The Nassim Park Residences project was Les Maisons Nassim the 6,286 square foot unit was sold to a buyer for $36 million ($5,727 per square foot). In Klimt Cairnhill, a 5,920 square foot duplex penthouse sold for $27.5 million ($4,645 per sq ft). A 4,822 sq ft apartment in Nassim Park Residences was sold at $22 million ($4,562 per square foot).
As far as the market for luxury rentals is concerned, monthly average rents for luxury homes that are not landed during the first quarter of 2023 increased in the range of 11.6% to $15,994. With five and four-bedroom luxury condos having the market with limited supply, rental rates for these homes experienced more rapid growth than those with three beds.
In the landed luxury sector, Huttons reports six detached homes in Good Class Bungalow (GCB) areas were sold during the 1Q2023 period which was worth $133 million. The figure represented 38.9% lower q-o-q and 68.6% lower y-o-y. “The more substantial deal of $3 million or more have been slowed down in 1Q2023 as compared to recent two quarters of 2022 due to the uncertainty in the economy,” add Huttons.
The largest deal to buy a detached home within the GCB region in 1Q2023 was the purchase of the 38 Binjai Park for $28.3 million which is $1,824 per square foot over a total land area of 15,515 square feet.
According to URA Realis data, the most expensive monthly rent by a GCB in the 1Q2023 quarter was one-hundred dollars each month. It was the GCB is located at Queen Astrid Park. It is the second highest rent ever paid to an GCB. The record of $200,000 a month is offered by the newly constructed 25,439 sq ft GCB at Queen Astrid Park in June 2022.
With the cooling measures rolling out on April 26th, Huttons notes that the increase in the amount of additional buyer’s tax (ABSD) for foreigners purchasing homes in Singapore property in Singapore between 30% to 60% up to 60% could impact on the property market. “This is most likely Singapore’s highest rate of tax for foreign buyers worldwide,” the report adds.
The luxury rental market could have more interest given that more foreigners are renting during the interim while applying for residence or nationality. Huttons also predicts that there will be more demand for Singapore’s Global Investor Programme, which gives permanent residency status to qualified global investors who want to steer their investments and businesses through Singapore.
To purchase GCBs, Huttons predicts the market to experience a normalized range of 40-50 transactions by 2023. “Sellers are waiting to find their ideal price while buyers wait for their citizenship to be recognized before they can purchase an GCB,” adds the report.