Luxury property market 'stable' despite GCB sales hitting record low

Only 23 good class bungalows were sold in 2023, the lowest in 27 years.

The luxury residential market in Singapore remains resilient amidst a notable drop in transactions, with prices showing growth, reports CBRE.

The CBRE H2 2023 report revealed that whilst the number of transactions for good class bungalows (GCBs) and luxury apartments decreased, prices showed signs of growth within the sector.

The GCB market saw the most notable decrease in activity, hitting a historic low with only 23 transactions in 2023 – the lowest since 1996. 

From July to December 2023, only nine GCBs were sold, amounting to $202.05m collectively. This marks a 67.1% year-on-year decline and a 64.9% decline from the first half of 2023. 

Similarly, luxury apartment sales dipped in the latter half of 2023, particularly after the additional buyer's stamp duty for foreign buyers doubled to 60%. 

However, the fourth quarter witnessed a quarter-on-quarter slight uptick, driven by strong demand for new launches. Despite lower transaction volumes, prices remained steady, with an average increase of 2.2% to $3,417 per square foot in 2023.

Transactions and price movements in Sentosa Cove mirrored those observed on the mainland of Singapore.

Tricia Song, CBRE head of Research for Singapore and Southeast Asia, projected that transaction volumes in the luxury residential market are likely to remain subdued for the first half of 2024 due to economic uncertainties and ongoing investigations into money laundering. 

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Additionally, despite stable rental yields, some property owners may feel compelled to sell due to the rise in property tax bills for high-value properties.

“Given Singapore’s strong fundamentals as a business hub, it should however continue to draw investors looking for a safe haven to park their wealth in the longer term,” said Song.

“If interest rates start easing and the economy recovers strongly in H2 2024, the price gap between buyers and sellers could narrow and market activity could pick up”, she noted.