The ABSD  hike in 2023 leads to the dip in prime condo sales prices

SRI Market Report released Jan 3 showed that at least eleven transactions for new ultraluxury condos were recorded last year. This includes units that cost S$10,000,000 or higher. By 2022, the number of sales would be 19. In May, a freehold 8,633 sq ft apartment at Les Maisons Nassim sold for S$45mil or S$5,213psf. There were 36 resale deals in 2023 which exceeded the S$10m threshold. This is a drop from 2022 when there had been 58. The highest sale was in September of a 10,710 sf unit at the Goodwood Residence Bukit timah, which sold for S$32,000,000 (or S$2,988/sf).

The analysis for the prime-homes-market only takes into account units of at least 2,500 sq. feet (sq.ft. ), located in high-value areas like Districts 1, 2, 4 and Sentosa. Districts 9, 10 or 11 are the Tanglin/Orchard Road region, Bukit Tamah and Holland Road regions, as well Newton/Novena.

The ABSD rates doubled, to 60 percent for foreign homebuyers. Landed homes worth S$2.1 million were sold in H2 20,23, down by 26 percent compared to H1. In total, sales in 2023 were S$5billion. This was about 18% below 2022. It is also 51.5% lower than the S$10.2billion record set in 2021. Only two Good Class Bungalows GCBs were sold during H2 in 2023 compared to the eight deals made in H1. The GCBs market registered 10 sales for 2023. This was half of what 2022 sold, and a significant drop from the 60 sales that occurred in 2021.

The average unit-land price dropped 42 percent to S$1,712psf by H2-2023 from S$2,952psf at H1-2023. ABSD, coupled with a mismatch of price expectations between sellers and buyers, led to a significant drop in sales volume for luxury non-landed properties.

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Prime condo prices therefore fell 6.6 percent in H2, to S$2,302psf, down from S$2,464psf last year as sellers decreased expectations about price premiums.

Singapore’s top residential property prices and sales suffered a hard fall in the second halves of 2023. This was due to a sharply higher Additional Purchaser’s Stamp Duty.

In H2 20,23, 64 prime non landed residential transactions totalled S$503.9. Prices per square foot averaged S$2,302. This is about half the number of deals in the first half of last year, which totalled S$1.2 million at an average S$2,625/psf.

For 2023 as a whole, there were 198 top condo deals totaling S$1.7bn – down 33.4 percent from S$2.5bn the previous years.

The 2023 figure was also considerably lower than that of 2022 and 2021, when 298 transactions were recorded.

The price of prime condominiums is not expected to increase in “significant manner” over the next 12 months. It may actually decline marginally as the premiums keep on eroding, and the homeowners do not show the same urgency. Prices are expected flat, and to range “between minus one per cent and two per cent in 2020, most likely on the negative side of the range. The prime landed sector had an equally muted year. Due to a limited supply of saleable goods, transaction volumes were lower all year.

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