Prime Residential Market Update H2 2023
Singapore luxury and landed home sales volume fall
24 April 2024
Hightlights
- There were 64 prime non-landed transactions in H2 2023, totalling S$503.9 million, less than half the S$1.2 billion in H1 2023. For the entire year, total sales value amounted to S$1.7 billion, a 33.4% decrease from the S$2.5 billion the previous year. The combined total of 198 prime non-landed transactions in 2023 was also substantially lower than the 479 and 298 transactions recorded in 2021 and 2022 respectively. The fall is largely attributed to the overall increase in Additional Buyer’s Stamp Duty (ABSD) rates and the doubling of the same for foreigner homebuyers, which came to effect at end-April 2023. Coupled with a mismatch in price expectations between buyers and sellers, sales volume for luxury non-landed homes dropped significantly with ABSD effectively cooling the high-end market.
- In the year ahead, prime non-landed home prices are unlikely to increase in any significant fashion and might even record marginal declines as premiums continue to be eroded with homeowners not exhibiting the same urgency as before. The majority of new launches next year in the prime areas are expected to be in the Downtown Core, and given the current lack of demand drivers for this market segment, price movement is expected to be flat between -1% and 2% in 2024, most likely at the negative end of the range.
- Transaction volume eased throughout the year due to limited saleable stock. According to URA, the Property Price Index (PPI) for landed homes rose 4.5% q-o-q in Q4 2023**. On a yearly basis, landed home prices increased 7.8%** with housing aspirations for this prestige property type intact, easing from the 9.6% growth recorded in 2022.
- Despite the fall in transaction activity, potential homebuyers remain on the lookout for landed homes due to lifestyle preferences for larger indoor and outdoor spaces. As such, evergreen demand for freehold landed homes will be supported in 2024 by the aspirations of Singaporeans, with homebuyers willing to move out of locations that are familiar to them in search of such properties. However, the main obstacle to deals being successfully concluded will be the limited inventory of saleable stock.
Read the full report here.
