Seeking Luxe Real Estate

Published date03 March 2023
Subject MatterReal Estate and Construction, Technology, Real Estate, Fin Tech
Law FirmWithers LLP
AuthorMr Kenneth Szeto

The Singapore real estate market is likely to remain buoyant in 2023.

2022 has been described as the year of the crypto crash, when virtual currencies suddenly lost their lustre, even before many could wrap their heads around what they were. The stock market didn't fare well either, as tech stocks plummeted, with the Nasdaq Composite index falling by a third.

However, brick-and-mortar real estate in Singapore has not only weathered the crypto storm in the background, but has also gone on to scale greater heights, notwithstanding factors like the Ukraine war, post-pandemic inflation and worldwide supply chain crunches.

Various market watchers and analysts appear to agree on a number of trends in the Singapore real estate market.

Gap in luxury property?

As Singapore continues to shine as a desirable destination for ultra high-net-worth individuals to live in, it is becoming apparent that there is a gap in uber-luxury apartments like those in leading global cities such as Hong Kong, New York and London. This is an observation by a veteran private client property consultant, who noted that the gap in this segment remains highly relevant as only Singapore citizens and exceptional permanent residents are permitted to build and own their bespoke trophy Good Class Bungalows.

Our tiny red dot of a city boasts some of the highest land costs in the world, yet UHNW clients may struggle to find a range of aspirational apartment homes in Singapore with the fittings and features on par with, say, 432 Park Avenue in New York, No. 1 Grosvenor Square, London or The Opus in Hong Kong. Undoubtedly, statement properties by their very exclusive nature are not easily sold. The stamp duty rules in place also do not incentivise developers to acquire land sites to build such properties, because hefty stamp duty payments apply if unsold inventory remains five years after the developer's original land acquisition.

However, this is undoubtedly a segment with real demand, and it remains to be seen if our existing property regulations can be finetuned to encourage developers to fill this gap in the residential real estate market, so that we can truly come into our own as a top global city.

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