Market Trends of Singapore Luxury Residential Real Estate Industry
This section covers the major market trends shaping the Singapore Luxury Residential Real Estate Market according to our research experts:
UHNWI in Asia Driving the Demand for Luxury Properties
Asia-Pacific will see a growth in ultra-rich individuals in the near future, which will likely merit Singapore's property market, seeing that the city-state has effectively handled the coronavirus pandemic.
A Chinese citizen from Fujian Province reportedly bought a sea-facing bungalow in Sentosa Cove's elegant residential enclave for more than SGD 39 million (USD 29.2 million), one of Singapore's latest big-ticket property deals. Near the city, a 5,070 square feet luxury penthouse at South Beach was purchased by a Chinese investor. Moreover, Taiwan's Tsai Family, owner of the Hong Kong-listed snack manufacturer Want Want China Holdings, bought all 20 units of a new condominium in one of Singapore's most elite neighborhoods in March 2021 for SGD 293 million.
These three transactions suggest that Singapore continues to be a pique of interest to wealthy Asian investors seeking to put down their money or find a second home. The city state's effective handling of the coronavirus pandemic has stimulated further property interest, as well as the upcoming boom of ultra-high-net-worth individuals in the Asia Pacific. Chinese citizens made up most foreign buyers, roughly 20-35% of purchasers each month.
Increased Sales Indicating the Steadily Rising Demand
The demand for luxury homes in Singapore is growing steadily. This is indicated by luxury property transactions of USD 5.5 billion in the first half of 2021. In H1 2021, the total sales volume for prime non-landed residential properties was recorded at USD 1.47 billion. It was the highest amount since H2 2010 when the sales of luxury property were USD 1.76 billion. This sales activity in 2021 rebounded from the pandemic-induced recession in 2020. The total sales for landed residential properties came to USD 3.16 billion. This demand was mainly driven by residents looking to upgrade to larger accommodation.
The Good Class Bungalow Segment (GCB) posted a stellar performance in the first half of the year and held steady in the second half despite the year-end festivities and diminished supply. In the overall luxury apartment segment, the number of transactions nearly doubled year on year. The higher Additional Buyer's Stamp Duty (ABSD) rates imposed on foreigners and investors will moderate the overall sales momentum for luxury homes. Despite that, demand will remain resilient due to rising rents and Singapore's safe-haven status amid geopolitical uncertainty.
