According to the latest data, luxury home sales in the first 11 months of this year decreased by 7.1% compared to the same period last year, with the total transaction value dropping by 19.3% year-on-year. Analysts believe that the anticipated reduction in loan interest rates next year may fuel a revival in the luxury property market.
Data provided by List Sotheby's International Realty shows that from January to November of this year, there were 404 units in prime private residences in the central core of Singapore that were transacted at prices of SGD 5 million or higher. This represents a decrease of 31 units compared to the same period last year, reflecting a year-on-year decrease of 56 units.
The sales volume of prime private residences started to rise in March but sharply declined from 73 units in June to 16 units. This decline is attributed to the government's additional buyer's stamp duty measures for investment and foreign buyers implemented in April. Sales volume rebounded to 26 units in July but dropped to 12 units in August following a money laundering case involving SGD 2.8 billion.
As of November this year, the total transaction value in the luxury property market was SGD 2.799 billion, a 19.3% decrease compared to the same period last year.
One unit at Leedon Residence on Nassim Road was transacted for SGD 45 million, commanding a price per square foot of SGD 5,213, making it the highest-priced apartment transaction in Singapore this year. Additionally, a premium bungalow in Chatsworth Avenue was transacted for SGD 42 million at a price per square foot of SGD 2,562.
Interestingly, there are reports that in May this year, three adjacent premium bungalows on Nassim Road changed hands for SGD 200.67 million, potentially reflecting the highest price per square foot for premium bungalows in history. However, as the buyers did not submit the sales prohibition order, this transaction is not reflected in the official data from the Urban Redevelopment Authority of Singapore.
Han Hwan Mei, Director of Research at List Sotheby's International Realty, pointed out that the additional buyer's stamp duty came into effect on April 27, but buyers holding purchasing rights before this had more time to complete transactions. As a result, many buyers rushed to exercise their purchasing rights, leading to an increase in sales volume from 42 units in April to 73 units in May.
The data also indicates that the number of luxury homes purchased by foreign buyers in the second half of this year is significantly lower than in the first half. From January to May, foreign buyers purchased 104 units, but from June to November, they only purchased 34 units, showing a significant decrease in numbers.
Sun Yan Qing, Vice President of Research and Advisory at OrangeTee & Tie, noted that the additional buyer's stamp duty has had a certain impact on the high-end private residential market as buyers are mostly investment-oriented. However, the impact of money laundering cases on the market is relatively small, as such cases are not common.
While a decrease in loan interest rates may help boost the high-end private residential market, the expected limited impact of next year's luxury home sales growth is due to the market still being constrained by cooling measures.
Nevertheless, Derrick Yap, President of DREA, is optimistic about next year's market trends. He believes that despite the decrease in transaction volume, potential buyers are still monitoring buying opportunities and hoping for price reductions. If new high-end private residential projects are launched next year, and loan interest rates stabilize and decrease, it is believed that demand for luxury homes will rebound.
He added that potential buyers include Singapore citizens and nationals from countries not affected by the additional buyer's stamp duty policy, such as the United States, Switzerland, and Norway. Additionally, Singapore's strict judicial system and stable real estate market continue to be attractive to foreign buyers.
