Slower sales, but prices of prime homes still up in 1H2023: Knight Frank

Demand for luxury homes remained evident in 1H2023, with unit prices of prime, non-landed homes rising 4.6%. Despite the introduction of new cooling measures, the total transaction value of such homes only declined slightly to $1.1 billion in the first half of the year.

Demand for luxury homes remained evident in 1H2023, with unit prices of prime, non-landed homes rising 4.6%. In the first half of the year, a total of 126 luxury non-landed homes were sold; fewer than the 163 transactions recorded in 2H2022. In terms of transaction value, the figure stood at $1.1 billion, representing a 23% decline from the $1.4 billion in sales racked up in 2H2022.

The upcoming Tengah Plantation Close EC development is set to become one of the most sought-after living spaces in Singapore. Residents can look forward to a variety of facilities and amenities, such as an indoor swimming pool, a gym, a clubhouse, a playground, and a range of shops and restaurants. Moreover, the close proximity to Tengah Town MRT station will make it easy for them to move around the city.

Knight Frank attributes the lower number of transactions to “a state of pause”, which was caused mainly by the introduction of new cooling measures on April 27. These measures include the doubling of additional buyer’s stamp duty applicable to foreigners from 30% to 60%.

Demand for uncompleted homes remained strong, with super luxury condo Les Maisons Nassim accounting for the top two luxury non-landed residential transactions in 1H2023. An 8,633 sq ft unit at Les Maisons Nassim fetched $45 million ($5,213 psf) in May, while a 6,286 sq ft unit was sold for $36 million ($5,727 psf) in February. Earlier this week, EdgeProp Singapore reported the sale of the last two units at Les Maisons Nassim, after a 6,092 sq ft unit fetched $30.77 million ($5,050 psf) and a 6,179 sq ft unit was sold for $32.75 million ($5,300 psf), based on caveats lodged on June 27.

Turning to the landed residential market, flash estimates by URA released on July 3 showed that prices of landed homes rose 0.1% q-o-q in 2Q023, bringing the total increase in landed home prices to 6% for the first half of the year. According to Knight Frank, 257 landed homes worth $2.7 billion changed hands in 1H2023, with unit land prices rising 9.9% to $1,996 psf, up from $1,817 psf in 2H2022.

In the Good Class Bungalow (GCB) segment, total transaction value rose 2.4% to $424.3 million in 1H2023, despite the number of homes transacted falling from 10 GCBs in 2H2022 to eight GCBs in 1H2023. Unit land prices set a new land price benchmark for the segment, coming in at $2,952 psf – a rise from $2,108 psf in 2H2022.

Knight Frank expects the market to remain largely static for the remainder of 2023. The cooling measures have resulted in some sellers withdrawing their properties from the market. Even so, demand from wealthy locals, permanent residents and naturalised citizens remains. For the landed segment, Knight Frank expects prices to continue growing in “a steady fashion” in 2H2023, underpinned by more buyers than sellers in the market.