Singapore residential investment sales slump 44% to S$3.42b in Q4

There were less GLS sites in the quarter and they were sold at lower prices.

Residential investment sales in Singapore nearly halved from S$6.11 billion in Q3/2021 to S$3.42 billion in Q4/2021. 

According to Savills, the QoQ decline was attributed not only to the reduced number of sites sold under the GLS Programme, but the lower price quantum of each of the awarded sites. 

Here’s more from Savills:

The two residential GLS sites located at Slim Barracks Rise awarded in the quarter only amounted to just S$482.5 million, a stark contrast compared to the S$3.74 billion public sales volume in the previous quarter. As these sites were of low quantum, they attracted a high level of interest with each of the two sites garnering ten bids. 

The high number of bidders could be due to developers wishing to replenish their landbanks amid depleting unsold stock. Moreover, the attractiveness of these sites can be attributed to limited new housing supply in the area and developers may have been encouraged by the relatively good sales of One-North Eden when it was launched in April 2021. 

The replenishment of landbanks by developers was also evident in the private sector, with five residential sites being transacted, including two collective sales. This resulted in investment sales of private residential sites almost tripling from S$584.0 million in Q3/2021 to S$1.58 billion in Q4/2021. 

There were two significant deals that exceeded S$500 million each, which included Watten Estate Condominium and two land parcels at Thiam Siew Avenue. The tender for Watten Estate Condominium was won by an 80:20 joint venture between UOL and Singapore Land Group for S$550.8 million in October 2021, 10% higher than the sellers’ minimum price of S$500 million. This was the second time the residential development was put up for sale, after the first failed attempt in July 2019 for S$536 million. 

The sale of Watten Estate Condominium also marks the largest residential collective sale in 2021. Separately, two freehold land parcels at Thiam Siew Avenue were sold to a joint venture between Hoi Hup Realty and Sunway Developments for S$815 million in November 2021. This was deemed as the largest residential site sold since the July 2018 round of cooling measures were introduced. 

However, the continual increase in home prices led to the implementation of a new round of cooling measures which took effect from 16 December 2021. This included a hike in the Additional Buyer’s Stamp Duty (ABSD) rate to 35% from 25% for developers purchasing any residential property, on top of the non-remittable 5%. The impact of the new cooling measures resulted in the abortion of the sale of High Point, which was originally acquired by Shun Tak Holdings. 

Although the deal was done before the new cooling measures were announced, the developer may have been concerned with the higher ABSD rates that are payable by foreign buyers (from 20% to 30%) as foreign buyers are the main group of homebuyers for luxury homes, hence calling off the deal.

Separately, transaction volumes of luxury homes sold for S$10 million and above (excluding sale of sites) declined marginally, from 92 units in Q3/2021 to 86 units in Q4/2021, which led to sales quantum decreasing 23.5% QoQ to S$1.36 billion. While there was a fall in the number of landed homes being sold, the number of sales of non-landed homes priced S$10 million and above rose from 28 in Q3/2021 to 41 in the quarter. 

Out of which, the priciest transaction was a penthouse unit at the newly launched Les Maisons Nassim for S$75 million, or S$6,210 psf ppr based on the strata area of 12,077 sq ft. The price quantum of S$75 million even surpassed the S$73.8 million deal for the super penthouse at Wallich Residence which was sold to James Dyson and his wife in 2019, making it Singapore’s costliest penthouse.