The COVID-19 pandemic has caused investors worldwide to prepare for volatile economic circumstances as the virus destroys countries worldwide, impacted Singapore’s luxury home market? The luxury high-rise residential market in Singapore seems to be holding up well in the face of the storm, boosted by the resiliency of houses in the Core Central Region, where high-end living retains its luster.
Historically, luxury living in Singapore was mostly concentrated in the traditional prime districts of 9, 10, and 11. However, during the last 15 years, the notion of luxury living has expanded to include urban and island life. Along with these excellent areas, the Core Central Region includes private homes in the Downtown Core (Districts 1, 2, 6, 7) and Sentosa Island (Southern Islands Planning Area), and is home to some of Singapore’s most opulent locations. These are preferred destinations for high-net-worth people (HNWIs), since their unique features appeal to a variety of luxury lifestyles.
Traditional Prime Districts, City-Living, and Island-Living are the Three Luxury Residential Enclaves. Districts 9, 10, and 11 in Singapore have long been associated with the city-position state’s of luxury living. The historic prominent areas retain their inherent status. Famous people have invested and built residences in the area, with District 9 having superstars such as Facebook co-founder Eduardo Saverin and movie actor Jackie Chan, both of whom own apartments in The Orchard Residences. Each of the development’s eight resale sales in 2020 exceeded SGD 5.5 million (about USD 4.18 million), with average prices above SGD 2,500 per square foot (psf) (approx. USD 1,889).
Apart from the typical prime districts, houses in Singapore’s Downtown Core are highly sought after owing to their strategic position in the heart of the financial sector and their urban lifestyle. Among the Downtown Core’s iconic residential developments is the flagship mixed-use complex Wallich Residences, which is perched atop Singapore’s highest skyscraper and provides luxury apartments with panoramic views from a height of 180m.
The property has risen to prominence due to the record high rates paid for its five magnificent penthouse apartments. Apart from the well-publicized sale of the building’s lone 21,108 square foot (sq ft) super penthouse to James Dyson for a whopping SGD 73.8 million (approx. USD 54.8 million) and subsequent resale to Indonesian-born tycoon Leo Koguan for SGD 62 million (approx. USD 46 million), a Taiwanese homebuyer paid SGD 17.5 million (approx. USD 13 million) (approx. USD 3,703).
For those seeking an escape from the city’s hustle and bustle, houses in Sentosa Cove provide the appeal of island and resort living in the heart of the city and are renowned as the only location in Singapore where foreigners may buy landed properties.
Ground is limited on the 117-hectare island, which is mostly made up of reclaimed land, and the enclave continues to be the exclusive home to about 2,000 or more residential units, with condos accounting for 80 percent of the total. While prices and activity levels have subsequently dwindled on the resort island, some high-value resale deals have materialized. The Marina Collection is an example of this, with six condominium units sold in 2020, four of which above SGD 6 million (approx. USD 4.45 million).
Resilience in Core Central Region (CCR)
Buyer demand in luxury houses in the Core Central Region has traditionally been high, and this region seems prepared to weather the storm even as Singapore confronts the uncertainty of a crisis. In the Core Central Region, non-landed transaction volumes were 2,998 units in 2020, up from 2,695 units in 2019 (excluding Executive Condominiums – ECs) (based on data available as of 1 February 2020). While overall sales volumes decreased between March and May 2020 due to an increase in COVID-19 instances, the number of transactions in the Core Central Region increased from June to July (Exhibit 1 below).
In 2020, Singapore’s premium property prices declined somewhat. The Urban Redevelopment Authority of Singapore’s (URA) index, which tracks non-landed property prices in the Core Central Region segment, showed a surprising increase of 3.2 percent quarter on quarter (q-o-q) in Q4 2020, and prices in the Core Central Region fell by a slight 0.4 percent overall in 2020, despite the year being rocked by pandemic-related uncertainty.
While containment measures interrupted real estate activity, new launches of luxury residential developments in the Core Central Region supported prices and activity. The opening of the residential development The M in Singapore’s Downtown Core resulted in a noticeable increase in transaction volumes in February 2020, with 354 units sold at an average price of SGD 2,442 per square foot (approx. USD 1,813).
Additionally, throughout the crisis, the typical prime districts of 9, 10, and 11 remained the most popular and resilient enclave. After the circuit breaker, transaction volumes in these areas gradually increased, with over 200 units changing hands each month in Q3 2020, surpassing the monthly average of around 190 units in 2019. In 2020, launches such as 19 Nassim, Dalvey Haus, and The Avenir sold at an average unit price of over SGD 3,000 per square foot (approx. USD 2,227).
While foreigners’ interest in luxury homes has waned as a result of travel restrictions limiting real physical viewings, the percentage of total units bought by international purchasers in 2020 has remained around 10%. Nonetheless, since prices in the Core Central Region have remained relatively stable in 2020, international homebuyers may expand their presence in the region after the epidemic has passed and travel restrictions have relaxed.
Investing in CCR Seems to be a Stable Haven
The apparently invincible stability of the Core Central Region economy may seem to be in stark contrast to the continuing epidemic. One explanation may be that COVID-19 concerns have drawn attention to Singapore’s robust and lasting economic fundamentals, a break in the clouds that prompted some of the world’s super-rich to establish themselves here. Singapore has also been establishing itself as a wealth management center, with the country’s family office sector growing fivefold between 2017 and 2019. This draws a high-net-worth group of individuals who are perfect for the luxury home market.
Singapore was also named the most livable city in the world for expats from other Asian markets for the 15th consecutive year in 2020, because to its superior infrastructure and facilities, low crime rate, and big expatriate population, which offers access to a social network.
Singapore’s selling of luxury high-end residential units is anticipated to increase in 2021 after green lanes of travel to designated countries are gradually opened and mass COVID-19 vaccines are implemented. And, despite the impending threat posed by the COVID-19 epidemic, global investors continue to see Singapore as a secure haven for residential property investment.
33 Devonshire at District 9 Singapore
Meanwhile, a new condo at District 9 set to launch in 2022. 33 Devonshire Condo which is located at 33 Devonshire road is near to Somerset MRT, 313 Somerset Centrepoint and many local gourmets at Killiney Road.
With a good unit mix from 1 to 3 bedrooms, this will be an ideal development for both homeowners looking for own stay or investors.