Singapore Luxury Property Selling Like Hot Cross Buns

Singapore luxury property is enticing the ultra-high net worth individual (UHNWI) to invest in real estate here due to Singapore’s stability, lower taxes and capital protection in the face of Covid-19 uncertainty.

Singapore may have surpassed a number of sophisticated cities, including Hong Kong, to become one of the most sought-after investment locations for the wealthy and famous.

Efforts over the last decade to develop Singapore’s economic infrastructure and financial centre have increased the country’s worldwide reputation and appeal to affluent investors.

Why are the ultra-high net worth individual (UHNWI) attracted to Singapore?

And why, in the face of economic volatility, are the ultra-rich purchasing luxury homes?

Sales Of Singapore Luxury Property Moving At An Exponential Rate:

Luxury property sales have reached a new all-time high in more than a decade. Private house sales in the core central region (CCR) increased over 25% quarter on quarter to 1,930 units in the 2Q of this year according to Urban Redevelopment Authority (URA)’s records. The last time a tremendous growth happened was in Q4 of 2010 with transactions of 2014 units. They increased by over 4.5 times year after year.

Nearly 3,500 luxury houses were sold in the first half (1H) of this year (2021), exceeding the yearly sales from 2018 to previous year.

Similarly, demand for landed property has increased, with over 2,100 properties sold island-wide in the first seven months of this year, nearly double the 780 sales recorded a year earlier (2020).

At the upper end, wealthy individuals purchased 272 luxury condominium units priced over $5 million in 1H of this year, the highest half-year total since the 1H of 2014.

Around 70 of these condominium apartments were super luxury houses valued at more than $10 million. In May, a 611-square-metre super spacious luxury new condo at Les Maisons Nassim was successfully transacted at $39 million.

In terms of per-square-foot (psf), the most costly transaction occurred in March, when a 282 square-metre resale condominium apartment at Eden in Draycott Park sold for $6,024 psf.

The M, Midtown Modern, The Avenir, Irwell Hill Residences, Fourth Avenue Residences, RoyalGreen, Hyll on Holland, Leedon Green and Kopar At Newton are the top-selling Singapore luxury condo new launch.

Marina One Residences, 8 Saint Thomas and D’Leedon were three of the most popular CCR resale condominiums.

Singapore Luxury Property: Who Are The Purchasers?:

More and more tycoons and international celebs are heading to Singapore to purchase luxury homes. These include renowned names like including Mr Eduardo Saverin, co-founder of FB; Mr James Dyson, creator of Dyson; Asian celebrities namely Jet Li and Jackie Chan; and Mr Zhang Yong, owner of Haidilao.

The Singapore housing market has gained from this wealth growth and an increase in Asian affluence. Numerous new participants to the luxury segment have amassed large fortunes, including burgeoning entrepreneurs working in developing sectors such as Big Tech, finance and biomedical.

Domestic purchasers are establishing a stronghold in our luxury sector too, as their market share continues to increase faster than that of international buyers.

According to URA data, 75.7%, or a whopping 2,315 luxury condos, were purchased by local Singaporeans in the 1H of this year (2021), up from 71.2%, or 961 units, in the 1H of last year (2020).

Foreigner purchases of luxury condos climbed similarly in absolute terms, from 162 to 254 units during the same time, showing that foreign purchasers are progressively returning despite global trade restrictions and additional buyer stamp duties (ABSD) imposed in 2018 which was raised by a further 5%.

Singapore’s wealthy population has increased rapidly to around 270,000 in 2021. Hence, there’s an interesting saying that every day in Singapore, a millionaire is made.

Singapore is 11th in the world for millionaire density, with over 1,300 UHNWI worth more than USD 50 million (S$67.4 million).

Income has risen for many Singaporeans, thus leading to their increased desire to purchase Singapore luxury property.

Wealthier families and rich millennials are climbing the ladder from first-time house buyers to premium property owners.

At the same time, the middle class is joining in the affluence race by purchasing smaller luxury condos.

What is it that attracts rich investors?:

• 1) C19 pandemic has pushed investors to put their eggs in different baskets and real estate is one of them to preserve their capital.
• 2) Singapore’s income and estate taxes are low in comparison to other countries.
• 3) There is no capital gains tax and our income tax is only 22%.
• 4) Singapore is known widely for our economic and political stability, low crime rate, friendly business environment and transparency in the legal arena.
• 5) Potentially good capital appreciation in the long term and our real estate intrinsic value is high.
• 6) CCR prices for non-landed residential private condos increased by 4.9% for the previous 5 years.
• 7) Above 90% of occupancy rate makes rental income favourable.
• 8) Many are looking to Singapore to park their funds in the luxury market segment other than Hong Kong as an Asian financial centre.
• 9) With the volatility facing Hong Kong, many big companies have set up headquarters and branches in Singapore instead.
• 10) With the travel restrictions slowly relaxing, more and more UHNWI will come into the Singapore luxury property market. Hence, this will raise our asset prices.

What Luxury Properties Are The UHNWI Purchasing?:

One of the reasons why Singapore luxury property sales have increased is because of the increasing number of new condo launches recently. Since last year 2020, many exclusive luxury developments have been launched offering a superb range of luxury and extravagance. These include super penthouses, sky bungalows and waterfront developments.

By the Singapore River, we have Rivière. Perfect Ten is another iconic upcoming new condo launch that promises views of lush greenery in Bukit Timah.

CanningHill Piers

In addition, integrated developments offering seamless connectivity to retail, F&B, hotel and MRT direct access at great sites in the prime areas of land scarce Singapore is rare. Several options in the market include Midtown Modern, South Beach Residences (which is just fully sold with a recent bulk purchase), Midtown Bay, Marina One Residences and upcoming debut of CanningHill Piers, in the heart of Clarke Quay. All these options have and will generate considerable attention and strong interest.

Klimt Cairnhill

Cuscaden Reserve, Klimt Cairnhill, Boulevard 88, Nouvel 18 and Cairnhill 16 are highly sought for by astute investors in Orchard Road’s most upscale neighbourhood.

Several of these releases are among the final wave of 2017’s “en bloc fever” houses.

New properties in desirable locales, particularly freehold or ultra-luxury houses, are scarce.

Some buyers believe that if they lose the chance to purchase such units today, they would have to wait another eight to ten years for the next en-bloc cycle.

Singapore Luxury Property Market: Is It Sustainable?:

• 1) As additional taxes are placed on the wealthy in some nations, the high-end market will stand to gain as the UHNWI continue to emerge in Asia and more people distribute their money and assets abroad.
• 2) The government’s slow release under the Government Land Sales (GLS) program, along with a scarcity of luxury homes in excellent areas, will certainly keep luxury residences in prominent places appealing.
• 3) With Singapore’s economy on the mend, we expect consumer confidence and luxury properties sales to rise even higher.

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Source: https://www.straitstimes.com/business/invest/luxury-properties-in-spore-selling-like-hot-cakes