Luxury Condo Market Activity Nearly Back Pre Cooling Measures Level Huttons Asia
According to research conducted by Huttons Asia, the luxury condo market experienced a rise in activity due to consistent demand. In their latest Prestige Report, which focuses on the high-end residential market, the consultancy revealed that 57 luxury non-landed homes were sold in the second quarter of 2024. This marks a 7.5% increase from the previous quarter. The total value of these homes amounted to $482.5 million, which is a 26% increase from the first quarter of 2024. Huttons attributes this growth to a gradual return of ultra-high-net-worth individuals (UHNWIs) to the market. The company’s CEO, Mark Yip, stated that the activity in the luxury non-landed homes market is almost back to the levels seen before the cooling measures were implemented.
The most expensive transaction in the second quarter was the sale of a penthouse at Skywaters Residences. The unit, which spans 7,761 sq ft and is located in the former AXA Tower in Tanjong Pagar, was sold for $47.34 million. This translates to approximately $6,100 per square foot (psf). The buyer is a foreigner, although their nationality was not specified.
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Despite the increase in luxury condo transactions and a 12.5% rise in rental transactions in the second quarter, rental rates remained relatively stable. Yip notes that while demand has increased, tenants are being cautious due to the current economic climate. However, he maintains a cautious outlook, as he believes the market may face challenges in the near future. The increased checks on the source of wealth of UHNWIs by the government may create friction in the market and could lead some UHNWIs to consider other wealth hubs, such as Hong Kong or Dubai. As a result, Yip predicts that luxury condo deals may decline in the second half of 2024.
In the Good Class Bungalow (GCB) market, a surge in sales value was seen in the second quarter, with eight units sold for a total of $299.1 million. This represents a 152.6% increase from the previous quarter when five GCBs were sold for $118.4 million. This rise in sales value can be attributed to several high-profile deals in the market. Yip believes this could be due to a narrowing of price expectations between sellers and buyers.
The largest GCB transaction in the second quarter was the sale of a property in the Bin Tong Park GCB area. The house, which sits on a land area of 28,111 sq ft, was sold for $84 million ($2,988 psf). The buyer is reported to be the daughter of a Chinese steel and nickel magnate. The second largest GCB deal involved a property at Jervois Hill, which fetched $58 million, or $3,843 psf based on the land area of 15,094 sq ft. The buyer is said to be a family member of one of the largest conglomerates in Indonesia.
In terms of rentals, most GCBs were leased for a monthly rent of under $30,000 in the second quarter. The highest rental deal was a property at Queen Astrid Park, which was leased for $75,000 per month.
