SINGAPORE: The condo resale market experienced a notable uptick in July, with a significant increase in transaction volumes. According to flash estimates from SRX and 99.co released on Aug 26, approximately 1,075 units were resold in July.
This marks a 32.2 per cent rise from the 813 units transacted in June. The Straits Times reported that compared to July 2023, the volume is up by 21.7 per cent and is 9 per cent higher than the five-year average for July.
Wong Siew Ying, head of research and content at PropNex, attributed the rise to seasonal patterns. “The increase in sales in July was partly seasonal, as more buyers and sellers returned to the market after the month-long school holidays in June,” she said.
The distribution of transactions varied by region. The outside central region (OCR) accounted for the largest share, with over 51.9 per cent of the total transactions.
The rest of the central region (RCR) contributed about 31.1 per cent, while the core central region (CCR) comprised 17 per cent.
Christine Sun, chief researcher and strategist at OrangeTee Group suggested that the higher demand for private homes may be linked to Housing Board (HDB) upgraders.
She noted that some HDB resale transactions have reached at least a million dollars, potentially providing upgraders with the necessary funds to purchase a resale condo.
Prices for resale condos increased by 0.8 per cent from June and 5.5 per cent from July 2023. Notably, prices in the CCR rose by 2.8 per cent month-on-month (MoM), marking the first increase in four months.
However, Nicholas Mak, chief research officer at mogul.sg described this as a“technical rebound” rather than a sign of a robust market recovery.
Prices in the RCR and OCR both saw a 0.4 per cent rise from June. Year-on-year (YoY), prices in the RCR increased by 7.1 per cent, OCR by 6 per cent, and CCR by 2 per cent.
The percentage of sub-sale transactions, which are secondary sales occurring before a project’s completion, fell to 7.1 per cent in July, marking a 5 per cent decrease from June.
Luqman Hakim, chief data and analytics officer at 99.co, attributed this decline to the competition from new launches such as Kassia in Changi and Sora in Jurong.
Mark Yip, chief executive of Huttons Asia, added that some price-sensitive buyers may have opted for resale units over new ones.
Mr Mak also noted that the pace of construction in many residential developments has normalised, overcoming earlier supply chain issues caused by the pandemic.
The highest-priced resale unit in July was a S$14.2 million unit at Nassim Park Residences.
The overall median capital gain for July was S$379,000, up by S$58,000 from June. District 15 (East Coast/Marine Parade) saw the highest median gain at S$631,000, whereas District 1 (Boat Quay/Raffles Place/Marina) recorded the lowest at a negative S$67,000.
The overall median unleveraged return for resale condos in July was 31.4 per cent. District 21 (Clementi Park/Upper Bukit Timah) saw the highest median return at 49.7 per cent, whereas District 1 recorded the lowest at a negative 4.8 per cent.
Analysts predict that the upward trend in the condo resale market will likely persist. Ms Sun pointed out that strong demand and a decrease in the supply of newly completed homes might help sustain resale condo prices.
Wong Shanting from ERA Singapore added that with interest rate cuts expected, more buyers are looking at the resale market to find valuable deals, especially for the limited freehold homes available. /TISG
Read also: 70% drop in Q2 condo launches caused by smaller project launches and cautious buyer sentiment
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