GCB sales see slowdown in 1H2022: CBRE
29 GCB transactions were recorded in 1H2022, including the sale of a bungalow at Chancery Lane (pictured) for $66.06 million in March (Picture: Samuel Isaac Chua/The Edge Singapore)
SINGAPORE (EDGEPROP) - Sales of Good Class Bungalows (GCBs) registered a decline in 1H2022 according to a report by CBRE Research. The first half of the year saw 29 GCB transactions worth $751.42 million, a decline of 57.7% y-o-y from the 59 GCB transactions amounting to $1.78 billion recorded in 1H2021.
“Following a banner 2021, GCB sales saw a slowdown, largely constrained by the limited supply of properties available for sale, macroeconomic uncertainty and a widening buyer-seller price gap,” CBRE says in the report.
Nonetheless, the average price of GCBs held firm in 1H2022, clocking in at $1,842 psf, up 6.3% y-o-y. CBRE notes that prices have risen 29.8% since the trough of $1,419 psf recorded at the height of the pandemic in 2020.
CBRE points out that the surge in prices since 2020 has resulted in a mismatch in buyer and seller price expectations. “Sellers are holding firm on their asking prices in anticipation of further price appreciation while buyers are turning more cautious given the increased economic uncertainties,” the report states.
CBRE expects the momentum in GCB activity to continue for the rest of 2022, as headwinds such as rising interest rates and the risk of a global recession, combined with a limited supply of properties, continue to impact the market. However, Singapore’s positioning as a wealth hub is expected to support demand for GCBs in the longer term.
Meanwhile, activity in the luxury apartment segment remained firm despite property cooling measures. In 1H2022, 115 caveats were lodged for luxury apartments in the Core Central Region, compared to the 104 transactions recorded in 1H2021. CBRE notes that average luxury apartment prices rose 2% to $3,200 psf in 1H2022 from end-2021.
Moving forward, CBRE expects the challenging global macroeconomic environment to dampen investor sentiment and investment volumes. However, prices in the luxury residential market could remain firm as investors continue to view Singapore as a safe haven.
CBRE expects interest in luxury apartments and Sentosa Cove bungalows to remain resilient in 2022, supported by the return of international travel to pre-pandemic levels and investor confidence in Singapore’s property market.
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