Analysis of Huttons Asia showed that one market segment specifically – private non-landed residential four-bedroom units which experienced an increase of 36.5 percent rise in demand in the initial quarter, compared with the fourth quarter of 2023.

Demand for leasing in this segment was 19.3 per cent higher over the previous year, as the Huttons report released on Thursday (May 2) showed.

The spike in the demand for luxurious four-bedroom homes the rents of these homes up 6.5 per cent in Q1 to an average of S$17,467 a month, from S$16,396 during Q4 2023, Huttons said.

The luxury property basket is comprised of homes that are located within the Core Central Region, valued at S$5,000,000 and above and with a minimum strata area size of 2,000 square feet.

The rise in rents and transactions for higher-end luxury properties contrasts trends in the wider market in which rents have been declining since the last quarter of 2023. Market rents overall fell 1.9 percent in the first quarter according to the most recent Urban Redevelopment Authority data released last week, extending the 2.1 percent drop in the prior quarter.

“The more demand for four-bedroom units may be due to a rise in high-net worth foreigners relocating to Singapore due to geopolitical conflicts,” said Huttons Asia’s chief executive officer, Mark Yip.

“It is (also) likely due to the low supply of such units” he said.

Huttons estimates that the volume of rental for luxury homes will reach 569 units by the end of Q1 2024, which is 3.6 percent more than Q4 however 2.6% lower year-on-year.

Projects such as Seascape, The Orchard Residences and The Residences at W Singapore Sentosa Cove had greater rent demand in the first quarter of 2018, Yip.

CBRE’s director of residential services Linda Chern, said developments like Boulevard 88, 15 Holland Hill and Leedon Green could also be seeing more demand.

“These are brand new developments, with bigger square footage and bigger areas,” she said.

The chief executive officer of ERA Singapore, Eugene Lim, observed that the private residential rental market is currently undergoing an unpredictability.

The market for mass rentals is a lot more affected by economic uncertainty and a slew of new home constructions. “In contrary, the premium rental market is performing very well because of the scarcity of larger units, which is expected to continue supporting rental price growth,” he explained.

He added that in the past, foreigners may have thought about buying an apartment instead of renting. The Additional Purchase Stamp Duty (ABSD), however, “continues a chokehold foreign buyers and encourages them to lease instead”.

Demand for rentals in three- and four-bedroom homes is driven by co-living operators and expatriates according to Wong Siew Ying, PropNex’s director of content and research.

“The supply of larger units for rent on the market is also limited, given that beds of three and four are typically purchased for owner occupation,” she said.

With fewer launches coming into the CCR with four-bedroom and larger homes, the ERA’s Lim noted that supply is expected to remain limited.

The high prices limit the number of buyers and discourage many developers from constructing larger units.

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Sales increase in the market for high-end products

In its report on the sector of luxury, Huttons suggested that sales in the premium market were also improving.

The value of sales in the resale industry was S$282.9million, an increase of 4.2% growth over the previous quarter. The transaction volume was estimated at 46 units for Q1. 34.3 per cent lower than the Q4 quarter.

The increased volume from the prior quarter is due to sales from a new project named Watten House. Stripping out the effect of Watten House sales, Huttons reported the total number of transactions for Q1 at 40 transactions, which is 17.6 percent higher quarter on quarter.

Huttons Yip stated that the escalating geopolitical tensions are causing buyers to buy homes in Singapore as a refuge from the rigors of war.

The rise in the cost of property in the CCR was higher than other regions in Q1. The CCR was able to record a price hike of 3.4 percent more than the gains in the range of 0.3 and 0.2 percent in the Rest of Central Region or Outside Central Region.

In the overall market, prices for private homes rose 1.4 percent in Q1 lower than the 2.8 percent rise in the previous quarter.

CCR home sales “continue to be driven by the local market, in particular after the tightening of ABSD measure in April 2023”, said PropNex’s Wong.

Foreign buyers have fallen to 3.5 percent of the total private home sales that aren’t landed in the CCR in Q1 2024. This is decreasing from 5.8 per cent in Q3 2023 and 5.6 percent in Q4 2023, she added.

She added, “We expect the foreign buyer interest to remain relatively low with the 60% ABSD rate on residential properties purchased by foreigners.”

Two new projects that are prime which include Newport Residences and Skywaters Residences – are expected to be launched within the next few months.

The top-selling luxury non-landed projects in the first quarter included The Ritz-Carlton Residences, Hilltops, Ardmore Park, Watten House, Nassim Jade, The Laurels, The Ladyhill and Grange Residences, said Huttons.

In the fourth quarter of 2023, which was the peak of the luxury market within the Good Class Bungalow segment (GCB) there were only five GCBs were sold.

Huttons data revealed that the total value of GCBs sold in the first quarter was S$118.4 million, which is 10.6 percent lower than the prior quarter.

“Buyers were hesitant to shell out a large sum for a GCB owing to the uncertain economy and the rise in interest rates, which resulted in an uninteresting first quarter,” said Yip.

The largest GCB deal by quantity was 15 Ford Avenue. It was sold to a scion from Wee Cho Yaw’s family for S$39.5million.

Tenant resistance helps keep GCB rental rates under control. Huttons said GCBs with rents for asking that were less than S$30,000 are still preferred by tenants as they “remain cautious and prefer not to pay for high rents”. The best deal was found situated in Tanglin Hill, which fetched a monthly rent of S$120,000.