Prices drop for Prime condo sales in H2 2023 following ABSD hike

The second half of 2023 saw a sharp drop in sales and prices for Singapore’s most expensive residential properties, due to the addition of Additional Buyer’s stamp duty (ABSD), which was a significant increase.

In H2 2023 there were 64 non-landed prime residential transactions worth S$503.9m, with an average price of S$2,302 psf. The previous half-year saw 134 transactions totaling S$1.2 billion, with an average price per square foot of S$2,625

In 2023 there will be 198 deals for prime condos worth S$1.7billion, a 33.4% drop from the S$2.5billion recorded the year before.

The number of deals in 2023 was also lower than in 2022 (298) and 2021 (479).

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The prime-homes analysis only counts units with a minimum size of 2,500 square feet in the districts 1, 2, and 4, the central business district, Sentosa, and 9, 10, and 11, the Tanglin/Orchard Road, Bukit Tiah, Holland Road, and Newton/Novena areas.

The ABSD rate increase that went into effect in April doubled the ABSD to 60% for foreign buyers.

ABSD has effectively cooled the high-end housing market, as it was combined with an unbalanced price expectation between buyers and sellers.

As a result, prime condo prices fell by 6.6 percent to S$2,302 per square foot in H2, down from S$2,464 per square foot a year earlier. This was due to sellers’ lower expectations for price premiums.

A SRI report published on Jan 3 indicated that at least 11 transactions were made for new ultra-luxury condominiums in the past year, i.e. units costing S$10,000,000 or more. In 2022 there will be 19 such sales.

The top unit on the list is a 8,633 square foot freehold Les Maisons Nassim that sold for S$45,000,000 or S$5,213 per sq. ft. in May.

In 2023, at least 36 resale transactions exceeded the S$10-million threshold. This is down from 58 transactions in the year 2022. In September, the most expensive sale was a 10,710 square foot unit at Bukit Timah’s Goodwood Residence. It sold for S$32,000,000 or S$2,988 per sq ft (see note on amendment).

Prime condo prices will not increase “significantly” in the next year. They may even see marginal drops as homeowners continue to lose their urgency and premiums are eroded.

Prices are expected to remain flat in 2024 and range between minus 1 percent and 2 percent, with the most likely negative end of this range.

The prime landed markets had a similar year. Due to limited stock, the volume of transactions decreased throughout the year.

In H2 2023, landed homes sold for S$2.1 billion, a decrease of 26 percent from H1. Total sales for the year were S$5 billion. This is about 18% less than in 2022 and 51.5% less than the record-breaking S$10.2 Billion in 2021.

In H2 2023 only two Good Class Bungalows were sold, compared to eight in H1. In 2023, the GCB market saw 10 sales, which is half the 20 GCBs that were sold in 2022 and significantly lower than the 60 in 2021. The average land price fell 42 percent to S$1,712 per square foot in H2 of 2023, from S$2,952 per square foot in H1 2023.

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