S’pore condo resale prices up by slower rate

Condominium resale prices edged up 0.1% month-on-month in June, easing from a 0.9% increase in May, according to flash data from real estate portal SRX released yesterday.

SINGAPORE: Resale prices for non-landed private homes grew at a slower pace in June as the number of transactions fell for the second straight month amid tighter Covid-19 measures.

Condominium resale prices edged up 0.1% month-on-month in June, easing from a 0.9% increase in May, according to flash data from real estate portal SRX released yesterday.

Year-on-year, resale prices were up 6.8% from June 2020, with increases across all regions. Prices rose 6.2% in the core central region or prime areas, while prices in the rest of central region or city fringes climbed 6.5%. Prices in the outlying areas or outside central region rose 7.1%.

An estimated 1, 510 units were resold in June, a 12.6% drop from 1, 727 units in May.

This was likely due to restrictions under Singapore’s heightened alert period, which saw fewer in-person viewings allowed, said Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie.

Mark Yip, chief executive of Huttons Asia, called the decline in transactions “surprising as the other segments of the market have seen a rebound in activities after the lifting of viewing restrictions”.

“We suspect it could be due to price resistance from buyers resulting in lower volume and flattish prices and lower capital gains in June, ” he said.

Nicholas Mak, ERA Singapore’s head of research and consultancy, noted that transactions for HDB resale flats rose 17.5% month on month in June but private condo resale volume contracted 12.6% over the same period.

“The main reason for the difference is that FOMO (the fear of missing out) among HDB flat buyers is not as strong among buyers of resale condos, if any, ” he said.

“The robust demand for HDB resale flats is driven by the longer wait for subsidised new built-to-order HDB flats. Although the delivery date of new condo projects that are under development will face the same construction delay that plagued the entire real estate market, the prices of new condo units are not subsidised.”

Despite the dip in volume, condo resale transactions June were still above the past 12-month average of 1, 406 units and higher than the monthly sales from June 2020 to February 2021, noted Sun.

SRX data showed transactions were 198.4% higher than in June 2020, and 83.9% more than the five-year average volumes for the month of June.

“The trends indicate that demand for resale homes is still at a healthy level and that the month-on-month sales decline may likely be temporary, ” said Sun.

She added that resales may rebound this month since viewing restrictions have been further eased and some people may rush to close a deal before the start of the Hungry Ghost Festival which falls in August.

Sun also expects condo resale prices to continue to rise in the coming months “as the supply of new homes remain limited and more HDB upgraders turn to the private resale market”.

Mass market homes made up about 58% of the private resale volume in June, noted PropNex head of research and content Wong Siew Ying.

A number of new mass-market launches are slated to come on soon – such as Pasir Ris 8, Watergardens At Canberra, and Parc Greenwich executive condominium (EC) – which should provide more buying opportunities for home buyers, said Wong.

“However, the price gap between new launches, excluding ECs, and resale properties could still see some quantum-sensitive buyers gravitate towards the resale market, ” she said.

“In addition, some buyers may prefer ready-built homes in the resale market to avoid uncertainties around completion delays for new projects. Hence, we expect the overall demand for resale homes to remain relatively strong, ” said Wong. — The Straits Times/ANN

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