Luxury Holds Steady

Luxury Homes H2 2018

Post-cooling measures

The three segments of the luxury market turned in mixed performances in H2 2018 as the wider market wrestles with the latest cooling measures. The key measure which has a dampening effect is the 5 percentage point hike in the additional buyer’s stamp duty (ABSD) which affects all, except those buying their first residential property.

The Good Class Bungalow (GCB) market turned out to be the most resilient segment with 25 houses sold in H2 2018, more than the 20 sold over the same period in 2017. For the whole of 2018, 42 GCBs were sold, same as in 2017. Over in Sentosa Cove, five bungalows were known to be sold, one fewer than the number sold in H2 2017. The slow down in H2 2018 led to a total sale of 11 bungalows in the whole year, down from 15 in 2017. As for the luxury apartment segment, the 131 properties sold in H2 2018 paled in comparison to the 197 sold in H2 2017. However, the total of 365 properties sold in 2018 was marginally higher than the 361 properties sold in 2017.

Besides sales volume, luxury home prices which have recovered swiftly in H1 2018, showed mixed performances. In H2 2018, the average sale price of $24.41 mil for each GCB was a gain of 15% from H2 2017 while the rate of $1,533 psf was 6.6% higher than the previous level. Over the same period, at Sentosa Cove, the average price of $20.02 mil per bungalow reflected a rise of 28% but the $1,806 psf on land area was 2.9% down from H2 2017 levels.The bungalow market treaded carefully in H1 2018. 17 Good Class Bungalows (GCBs) were sold, compared to 22 in H1 2017. In Sentosa Cove, six bungalows were sold, compared to nine in H1 2017. In terms of the price per square foot, GCBs reflected an average of $1,490 psf, 20% higher than in H1 2017. Sentosa Cove’s bungalow sales averaged $1,598 psf, marginally higher than the $1,574 psf in H1 2017. The 17 GCBs raked in a total amount of $419 mil, some 10% lower than a year ago, though the average value per transaction increased 17% to $24.66 mil. The more subdued Sentosa Cove bungalow market registered a total investment value of $80 mil, 40% lower than the amount in H1 2017 and the value per transaction fell some 10% to an average of $13.35 mil.

Prices of luxury apartments averaged at $7.35 mil per unit and $2,741 psf in H2 2018, representing a  decline of 3.1% and rise of 18% respectively from H2 2017 levels.

Based on the above statistics, luxury prices could have established a firmer and higher footing if no cooling measures were introduced. It was mainly due to a knee jerk reaction in the wider market which dampened market sentiments. As a result, the luxury market also slowed down, even though luxury home buyers’ buying decisions are guided more by whether the property suits their needs, objectives and liking, and are less affected by the measures.

Good Class Bungalows (GCBs)

H2 2018 saw the most expensive GCB ever sold to-date. Sold at the price of $93.90 mil, this  property at Dalvey Road has a sprawling land area of 52,055 sq ft, big enough to be redeveloped into three GCBs.

The 42 GCBs sold in 2018 amounted to an investment value of $1.029 bn, 16% higher than the sum of $888.55 mil for the 42 GCBs sold in 2017. This is the first time the amount crossed the $1 billionth mark since 2011. Using the land rate as an additional yardstick for pricing, GCB transactions in 2018 were sold at$1,515 psf, 14% above the $1,329 psf registered in 2017.

One factor which contributed to the high investment value in 2018 is that the top 10 GCB transactions were priced between $30 mil and $94 mil each. This is because they are either larger plots or new builds. Compared to 2017, the top 10 GCBs sold were priced between $26 mil and $46 mil each. We expect the interest in large GCB plots to continue in 2019.

While a slowdown in the residential market can be expected in H1 2019 due to the uncertainties in the global economic front, we expect the GCB market to remain relatively stable. This is because buyers and owners are long term investors with strong financial backing. Moreover, the limited stock of GCBs will enable prices to hold firm with 35 to 45 transactions through 2019.

Sentosa Cove Bungalows

In H2 2018, a significant deal valued at S$33.30 mil for a single-storey bungalow at Sentosa Cove was sealed. The price quantum is the highest deal for a Sentosa Cove bungalow since September 2013. The property has a view of the southern seas and is one of the few plots with a sizable area of 18,557 sq ft.

The marginal fluctuations between the H1 2018 price level and those in H2 2017 and H1 2017 could signal that Sentosa Cove bungalow prices are bottoming out. With the recovery in the luxury residential market gathering pace, it is a matter of time a price rebound in the Sentosa Cove bungalow market will take place. This presents a window of opportunity for investors to assess this segment of the luxury market and take a mid- to long-term position.

A total of 11 bungalows at Sentosa Cove were sold in 2018, fewer than the 15 bungalows in 2017. Besides external factors such as US-China trade war and Brexit uncertainty, the slowdown in 2018 could also be attributed to the new cooling measures, the chief of which is the 5% rise in ABSD. Locals who are buying their second property will have to pay an ABSD of 12%, and 15% for their third and subsequent property. PRs who are buying their second and subsequent property will have to pay an ABSD of 15%. Foreigners will have to pay 20% for all property purchases.   

Caveat data shows that in 2018, the 11 bungalows were bought by six Singaporeans, three PRs, one foreigner and a company. For the 15 deals in 2017, eight bungalows were bought by Singaporeans, three by PRs and four by foreigners.Thus, the reduction is mainly due to Singaporean and foreign buyers.

Despite the lower volume, the 11 transactions reflect a land rate of $1,707 psf, which is 1.6% higher than $1,681 psf established by the 15 sales in 2017.

We expect the Sentosa Cove market to stabilise at current levels in 2019, both in terms of sales volume and price levels. Sentosa Cove is an ideal option for foreigners who desire to buy and own landed homes as well as enjoy a lifestyle by the sea. With a limited stock of around 370 landed homes, the downside on residential values would be quite minimal.

Luxury Apartments

In H2 2018, 131 luxury apartments were sold, which was about 56% of the 234 units sold in H1 2018. Two new launches – 3 Orchard By-The-Park and  South Beach Residences – sold 4 units ($3,730 psf) and 18 units ($3,400 psf) respectively.

For the whole year, the 365 units sold comprised 312 units (85%) priced between $5 mil and $10 mil each, and 53 units (15%) priced above $10 mil each.

New Futura was the best-seller, accounting for 21% of the total sales (74 units), followed by The Nassim at 6% (21 units) and Gramercy Park at 4% (15 units). 

The 74 caveats lodged for New Futura reflected an average price of $3,461 psf. The 7,836 sq ft penthouse on the 35th level which fetched $36.28 mil ($4,630 psf)was the most expensive luxury apartment to be sold in 2018.  The second position went to a 7,287-sq ft penthouse in Gramercy Park which was sold for $24.50 mil ($3,362 psf). 

The 21 units at The Nassim fetched an average price of $3,260 psf. The most expensive unit that was sold was a $19.60 mil ($2,776 psf) penthouse on the 5th level  which has a strata area of 7,061 sq ft.

Eight luxury apartments broke the $4,000 psf mark in 2018: two units each of Boulevard Vue, New Futura, Le Nouvel Ardmore and Wallich Residence. 

Profile of buyers

A total of 2,790 caveats were lodged for non-landed transactions in the CCR in 2018, 31% lower than the 4,050 caveats lodged in 2017. Properties that were priced below $2 mil made up 38% (1,071 units), those in the $2 mil to $ 5 mil price band made up 49% (1,359 units), and 13% (360 units) were luxury units priced above $5 mil.

Comparing the buyers’ profile in 2016, 2017 and 2018, the proportion of Singaporeans who bought properties priced below $2 mil had edged up from 72% to 78%. For properties in the $2 mil to $5 mil range, the proportion of Singaporean buyers remained fairly stable at 63%. In the luxury category, the proportion of foreigners/PRs were in the lead, having risen from 55% in 2016 to 62% in 2018.

Buyers from China continued to be the top group of foreign/PR luxury home buyers with a 28% share. Indonesians were the next with 8% share, followed by Malaysians with 3% and 2% each of Indians and Britons. In total, they accounted for 43% of the total.


There will be more choices of new luxury apartments in 2019, notably the four projects at Draycott Park, Cuscaden Road and Nassim Road. Developers will compete on product differentiation, creative pricing and marketing strategies to woo investors. We expect prices in 2019 to move sideways against a lower sales volume.