SINGAPORE, Sept 29 — The sale of luxury homes in Singapore’s upscale central region covering Bukit Timah, Holland, Sentosa and other sought-after areas hit a 10-year high in the second quarter, based on a report released by property firm OrangeTee yesterday.

Data from the Urban Redevelopment Authority (URA) showed that private home sales in the core central region surged 25 per cent quarter-on-quarter to 1,930 transactions. This is the highest showing since the fourth quarter of 2010 when 2,014 units were sold, OrangeTee said.

The core central region also covers Orchard Road, Newton Road and the city areas. OrangeTee did not define the term “luxury” in its report.

The sale of private homes in the core central region also shot up more than 4.5 times compared to the second quarter of last year when some of the strictest Covid-19 restrictions were in place.

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Property analyst Nicholas Mak of ERA Realty attributed the large number of sales of such homes to the high number of units released for sale in the second quarter of this year.

He noted that a total of 1,019 new units were put up for sale in the core central region during this period, one of the highest since the fourth quarter of 2013 when 1,093 units were launched.

Other analysts attributed the jump in demand to the high vaccination rates in Singapore, which have boosted consumer confidence, as well as the presence of high net-worth individuals looking to invest in property here.

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In the first three quarters of this year, 339 condominiums were sold with price tags in excess of S$5 million each. Of this number, 74 cost more than S$10 million each.

The priciest luxury sale in terms of price was a 611sqm apartment at Les Maisons Nassim along Nassim Road near Orchard Road. It was sold for S$39 million in May.

The landed housing segment has similarly seen a leap in demand, with 2,407 properties transacted islandwide in the first eight months of this year, a 140 per cent jump from the same period a year ago.

In the first eight months of this year, more than 50 Good Class Bungalows were transacted, with one such 2,988sqm property on Nassim Road sold for S$128.8 million in March.

During this same eight-month period, 3,883 luxury homes were sold, surpassing the annual sales in each of 2018, 2019 and 2020.

This year’s best-selling new luxury condominiums are: Midtown Modern in Bugis, Irwell Hill Residences off River Valley Road, Leedon Green near Farrer Road, Fourth Avenue Residence in Bukit Timah, and Hyll on Holland along Holland Road.

Property analysts expect demand for luxury homes to remain strong in the coming year as Singapore opens up its borders. Confidence in the business environment here will also attract investors looking for property, they added.

New and resale transactions

New home sales in the core central region hit an 11-year quarterly high with 813 transactions in the second quarter of this year, while resales rose to a 12-year quarterly high with 1,109 transactions.

On a per square foot (psf) basis, 337 luxury condominiums were sold for S$3,000 psf and 45 were above S$4,000 psf, excluding bulk purchases.

The most expensive transaction on a psf basis was a 282sqm resale condominium apartment at Eden along Draycott Park, which sold for S$6,024 psf in March this year.

Upward trajectory in prices

The average prices of new luxury condominiums rose by 5.2 per cent to S$2,652 psf in the third quarter of this year from a year earlier, OrangeTee said.

Likewise, resale luxury condominium average prices increased by 7.1 per cent over the same period, from S$1,773 psf to S$1,899 psf.

More than 200 units of what OrangeTee dubbed “super luxury” new condominiums were also sold for more than S$3,000 psf this year.

These include projects at 3 Cuscaden and Boulevard 88 in the Orchard Road area, Klimt Cairnhill in Newton, The Avenir in the River Valley area and Midtown Modern in Bugis.

The report also noted that buyers were snapping up larger luxury condominiums in recent months.

For instance, 42.3 per cent of condominium purchases in the core central region were at least 1,200sqf in the third quarter of this year, up from the 37.4 per cent in the second quarter and 31.8 per cent in the first quarter.

Similarly, demand for “very large-sized luxury condominiums” that were at least 1,600sqf rose to 23.6 per cent in the third quarter of this year, up from the 22.1 per cent in the second quarter and 18 per cent in the first quarter.

This indicates that there are more deep-pocketed investors in the market with the means to buy bigger and pricier luxury homes, it noted.

Reasons for demand in luxury real estate

The real estate market here is attractive to investors given the relatively low estate taxes in Singapore compared to other countries, OrangeTee said.

Expatriates also viewed Singapore as a livable and culturally vibrant country, enticing them to invest in private property here.

As the intrinsic value of property in Singapore is high, investors enjoy attractive rates of capital appreciation in the long run, the report said.

URA’s price index for condominiums in the core central region showed that prices grew 4.9 per cent over the past five years.

Mark Yip, chief executive officer of property firm Huttons Asia, said that there has been a surge in liquidity in Singapore since April last year, with ultra-high-net-worth individuals moving their wealth to set up family offices here. This refers to a legal entity used by the wealthy to arrange their assets.

The availability of Covid-19 vaccines coupled with high vaccination rates have boosted the confidence of such individuals, prompting them to invest in Singapore, Yip added.

Ismail Gafoor, chief executive officer of property firm PropNex Realty, noted that more than half of the new homes sold at launches in the first half of this year were one — or two-room bedroom units, making them more affordable to buyers.

This attracted many Singaporeans and permanent residents to enter the market, Ismail added.

He noted that this group accounted for 90 per cent of buyers for non-landed new home sales in the core central region in the first eight months of this year.

Demand expected to stay high

OrangeTee predicts further sales of luxury homes, with prices likely to climb in the coming months because Singapore’s economy is expected to rebound strongly this year and consumer confidence is likely to pick up further.

Demand for luxury homes may also go up as Singapore opens up its borders and more foreign investors return, OrangeTee said.

Similarly, Yip of Huttons expects the luxury property market to be boosted until next year along with a strong global economic recovery.

With Singapore opening up its borders, investors will be attracted to come here since it boasts a high vaccination rate and has a stable political environment, he added.

However, Mak, the head of research and consultancy at ERA Realty, said that the rising number of Covid-19 cases that is ongoing now could dampen demand for luxury homes in the coming months.

Independent property analyst Ong Kah Seng, on the other hand, said that multinational corporations remain confident of Singapore’s reopening despite the rise in Covid-19 cases and will continue to send senior expats to Singapore, boosting the luxury property rental market. — TODAY