Prime residential sales remain firm in H1; high-value transactions surge

Published: Jul 10, 2024 by 
PropertyGiant Singapore
Knight Frank believes the non-landed luxury housing market is still uncertain due to cooling measures. Photo: Bing Hui Yau on Unsplash
Knight Frank believes the non-landed luxury housing market is still uncertain due to cooling measures. Photo: Bing Hui Yau on Unsplash

Prime home transactions in Singapore remained brisk in the first half of 2024, exceeding H2 2023’s figures across all residential types in terms of both sales value and transaction numbers.

The latest report by Knight Frank released on Tuesday (Jul 9) showed that a total of 98 luxury non-landed homes changed hands with a total sales volume of S$736.7 million, up 28.2 per cent from S$574.7 million across 72 transactions in the previous half-year period.

The top luxury non-landed home transaction during this period was the sale of a penthouse unit at Skywaters Residences at S$6,100 per square foot (psf), or S$47.3 million.

Prime non-landed market outlook uncertain

Nicholas Keong, head of residential and private office at Knight Frank, said the increase in prime non-landed sales values was largely driven by buyers who continue to seek “family-sized, ready-to-move-in units primarily for their homestay”.

He however noted that this was the second consecutive half-year period where total prime home sales value amounted to less than S$1 billion, and attributed this to “suppressed demand” from the government’s property cooling measures.

“Despite the pickup in transactions, the prime non-landed home market remains uncertain, hamstrung by cooling measures,” noted Keong.

A total of 284 landed homes, defined by Knight Frank as properties being sold for S$5 million and higher, were transacted in H1 of 2024 as opposed to 263 in the prior half.

Total sales value of such homes swelled 18.3 per cent to S$2.6 billion from S$2.2 billion in H2 2023, which Keong noted was a rebound from the 23.8 per cent fall from the first to second half of 2023.

“While some landed homebuyers choose to purchase older homes to undertake reconstruction to suit their lifestyle preferences, many others instead bought redeveloped homes from boutique developers,” he said.

“With demand for new landed homes continuing to be sought after by homebuyers, older landed homes, especially those that are situated in adjoining decently sized landed plots, have been acquired by smaller developers who subdivide, preferring to redevelop these homes into at least five new homes for sale.”

“Notable uptick” in high-value transactions

SRI’s head of research and data analytics, Mohan Sandrasegeran, observed that landed property transactions priced at S$10 million and above rose to 38 units in Q2 of 2024, from 33 units in the prior quarter.

He hails this as a “notable uptick”, being the highest quarterly total since 43 landed units were transacted in Q1 2023.

“This rise in high-value transactions indicates an inherent presence among affluent buyers seeking exclusive and luxurious residences,” said Sandrasegeran.

“The increase could be attributed to several factors, including the limited supply of high-end landed properties, the desire for long-term investment opportunities, and the appeal of prestigious addresses.”

Looking ahead, Keong of Knight Frank believes landed homes priced at valuation – or slightly under – would continue to be “quickly snapped up” in the current market, though most sellers continue to maintain asking premiums.

He expects prices of landed homes to be supported with slight increases throughout 2024, as does SRI’s Sandrasegeran, who believes the landed property market is “poised for continued growth”.

“The market’s resilience, even amid moderate growth, underscores its attractiveness to high-net-worth individuals seeking long-term investment opportunities and luxurious living spaces. As such, we anticipate a positive outlook for the landed property market for the remainder of 2024, with stable economic conditions further bolstering this trend,” said Sandrasegeran.

GCB activity may pick up

Activity in the Good Class Bungalow (GCB) segment rose in H1 2024 to a total of five transactions as opposed to only two GCB sales in H2 2023, according to Knight Frank data.

The consultancy’s definition of GCBs includes bungalow developments larger than or equal to 1,400 square metres, and which are located within GCB areas. It also includes designated GCBs by the authorities.

Keong of Knight Frank noted the latest five transactions included the S$84 million sale of a bungalow at Bin Tong Park. The property was reported by The Business Times in April this year to have been purchased by the daughter of China-born steel-and-nickel magnate Xiang Guangda.

“In the months ahead, should economic conditions become more certain and if interest rates are cut, there might be more activity in the GCB space from globally mobile high-net-worth individuals and families that have decided to become Singapore citizens,” he added.

On the other hand, SRI’s research showed there were at least 10 caveated GCB transactions during H1 2024, up from seven of such transactions in the same period the year before.

Sandrasegeran however emphasised that the said data may not accurately reflect the total number of transactions or the true pricing trends within this exclusive segment.

“Based on observations and insights from our on-the-ground sources, we understand that a segment of GCB buyers and sellers prefer to maintain a low profile, especially when dealing with transactions of such high value. This preference for privacy can result in some transactions not being publicly recorded or appearing in databases like Realis,” he said.

Credit: The Business Times

Singapore Property
Property Sales

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