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GCB and luxury residential transactions declined in 2H2023 but prices remained stable: CBRE

By Nur Hikmah Md Ali

/ EdgeProp Singapore |

March 26, 2024 5:23 PM SGT

A total of 23 Good Class Bungalows were sold in 2023, a historic low since 1996 (Photo: Samuel Isaac Chua/EdgeProp Singapore)

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SINGAPORE (EDGEPROP) - Transaction volumes for Good Class Bungalows (GCBs) and luxury apartments declined in 2H2023 despite indications of price growth, according to a report by CBRE on the Singapore luxury market released on March 26.

In the GCB market, nine GCBs worth a collective $202.05 million changed hands in 2H2023.

This marks a 67.1% slump in value y-o-y and a 64.9% drop compared to the $575.27 million sold across 14 GCBs in 1H2023.

The report attributes the decline to the ongoing money laundering crackdown since August last year, as well as the high interest rate environment and economic uncertainties.

For 2023, 23 GCB transactions were recorded — a historic low for the number of GCBs transacted in a year since 1996. In terms of value, the deals totalled $777.32 million in 2023, nearly half of the $1.37 billion transacted in 2022 across 47 GCBs.

Average GCB prices in 2H2023 fell with the lower volumes, declining 25.4% from $2,631 psf in 1H2023 to $1,963 psf in 2H2023. Nonetheless, prices grew for the full year, climbing from an average of $1,952 psf in 2022 to $2,417 psf last year.

The luxury condo market also saw a similar decline in sales in 2H2023, likely caused by the increase in additional buyer’s stamp duty levied on foreign buyers to 60%. A total of 63 luxury apartments changed hands for $579.65 million in 2H2023, compared to 92 units sold for $964.67 million in 1H2023.

In 2023, 155 luxury apartment units with a total transaction value of $1.544 billion were sold, down from 223 units worth $2.182 billion in 2022. This is the lowest recorded transaction value for luxury condos since 2020.

CBRE notes the launch of the 180-unit Watten House along Shelford Road in Bukit Timah (District 11) last November boosted sales volume in 4Q2023, with 102 units sold at an average price of $3,230 psf.

Despite the lower transaction volume, prices held firm, with the average price for luxury apartments in CBRE Research’s basket rising 2.2% from $3,343 psf in 2022 to $3,417 psf in 2023. This is supported by limited premium stock.

Tricia Song, CBRE’s head of research for Singapore and Southeast Asia, predicts that transaction volumes will remain subdued in 1H2024. This is likely due to the continued softening of sentiment brought about by economic uncertainties, cooling measures, and ongoing money laundering investigations.

Given Singapore’s strong fundamentals as a business hub, it should continue to draw investors looking for a haven to park their wealth in the longer term. “If interest rates start easing and the economy recovers strongly in 2H2024, the price gap between buyers and sellers could narrow, and market activity could pick up,” Song adds.

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