Luxury residential sales fall in 2Q2023; Les Maisons Nassim tops condo transactions
According to data compiled by Huttons Asia, an estimated 80 non-landed luxury homes were sold in 2Q2023 (Picture: Samuel Isaac Chua/The Edge Singapore)
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SINGAPORE (EDGEPROP) - The luxury residential market has taken a hit following the cooling measures that came into effect on April 27, including the doubling of additional buyer’s stamp duty (ABSD) applicable to foreigners to 60%.
According to data compiled by Huttons Asia in its 2Q2023 Prestige Report that tracks the luxury residential segment, an estimated 80 non-landed luxury homes were sold in 2Q2023. This is 34.4% lower than the 122 homes sold in 1Q2023. The homes sold last quarter totalled $657.3 million in value, or 28.8% lower than the previous quarter’s $923.4 million.
This brings luxury non-landed homes sold in the first half of the year to 202 units worth $1.58 billion. The transacted value is 7.1% higher than the corresponding period in 2022.
Huttons notes that buyers from the US topped the list of foreign purchasers of luxury non-landed homes in 2Q2023. The finding is consistent with an OrangeTee & Tie research report published last week, which observed that Americans were the biggest cohort of foreign buyers that purchased property in Singapore last quarter, replacing mainland Chinese buyers who had occupied the top spot from 2017 to 1Q2023.
In its 2Q2023 report on private residential trends, OrangeTee & Tie cited URA data showing that US buyers accounted for 56 condo purchases, lower than the 63 transactions recorded the previous quarter. However, US buyers exceeded those from China, who purchased 51 condo units in 2Q2023, halving from the 109 purchased in 1Q2023.
The resilient number of purchases by US nationals is due to the fact that American citizens are accorded the same stamp duty treatment as Singaporeans, given the trade agreement that exists between the two countries. As such, the hike in ABSD to 60% does not apply to US buyers.
Luxury projects that saw notable transactions in 2Q2023 were led by Les Maisons Nassim, which recorded the four biggest transactions by absolute quantum last quarter. The sale of an 8,633 sq ft unit to a US national for $45 million ($5,213 psf) in May was the top non-landed luxury deal.
Source: URA, Huttons Data Analytics as of July 21
Huttons’ report also highlights that more luxury non-landed homes were leased out in 2Q2023, though average monthly rents eased by 1.9% to $15,832. “There are early signs that rents of luxury non-landed homes may have reached its plateau,” the report states.
Elsewhere, the Good Class Bungalow (GCB) market remained quiet in 2Q2023, with an estimated seven GCBs sold. However, the total value transacted came in at $392.3 million, which is 195% higher q-o-q and 34.8% higher y-o-y.
Huttons attributes the jump in transacted value to the sale of a portfolio of three GCBs on Nassim Road for $206.7 million, or a record $4,500 psf. The buyer of the portfolio is said to be the family behind Singapore-listed palm oil producer First Resources. The family also reportedly purchased another Nassim Road GCB for $88 million ($3,916 psf).
In the coming months, Huttons believes transaction volume in the luxury residential market may further slow as the cooling measures continue to take a toll. On the flip side, this could result in more demand in the luxury rental market, as foreigners keen to stay in Singapore for the long term will continue to rent while waiting to be granted permanent residency or citizenship.
Check out the latest listings for Les Maisons Nassim properties
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