New Reporter
07-07-23, 11:08
Where to find the ‘hot’ resale condo units
The resale market will likely see more sales activities as around 19,000 landed, non-landed, and EC units will be completed in 2023.
Christine Sun
7 July, 2023
Resale properties are growing in popularity for their spaciousness and affordability. Demand has been rising as the median per square foot price gap between new and resale condos has continued to widen over the years.
In 2021, the price gap was 38.9 per cent, but this rose to 55.2 per cent in 2022 and 62.9 per cent in the first five months of 2023, based on the Urban Redevelopment Authority’s (URA) data.
In addition, more buyers have turned to the secondary market since the additional buyer’s stamp duty (ABSD) was raised. For instance, a Singaporean couple upgrading from a Housing Board flat to a $1.8 million new condominium unit must pay an ABSD of $360,000 if they were to keep the flat until the completion of the new home.
However, many buyers may not have the means to pay the ABSD upfront, even if they can apply for a remission after selling their flats. They must still set aside the budget for the down payment, buyers’ stamp duty and legal fees. Therefore, more HDB upgraders have bought resale properties since they are ready for immediate occupation.
With more resale condominiums being completed this year, how will prices and demand change? What types of resale homes are Singaporeans buying now?
Big suburban condos
Condominiums in the suburbs, especially the big units, are in the greatest demand now. Singaporeans have been snapping up larger suburban private homes as they need to set up dedicated workspaces or makeshift home offices in the era of hybrid work.
Further, there were few projects launched in the suburbs, leaving buyers with lesser housing options.
By region, the lion’s share of non-landed resale transactions was from the outside of central region (OCR), where 2,082 or slightly more than half of the total units changed hands from January to May 2023. Another 30 per cent were in the city fringes or the rest of central region (RCR), and 20 per cent were in the luxury segment or core central region (CCR).
Resale condominiums of 1,000 sq ft but less than 1,200 sq ft in OCR registered the highest transactions among the sub-markets, followed by 1,200 sq ft to less than 1,400 sq ft.
About 92 per cent of suburban condos between 1,000 sq ft and less than 1,400 sq ft were sold below $2 million, whereas 90 per cent of new condominiums in the same size range were transacted between $2 million and $3 million this year.
Places, where most suburban resale condominiums of between 1,000 and less than 1,400 sq ft took place, include District 19 (Hougang, Serangoon Garden and Punggol), District 16 (Bedok, Upper East Coast, Eastwood and Kew Drive), District 23 (Hillview, Bukit Panjang, Choa Chu Kang and Dairy Farm) and District 18 (Tampines and Pasir Ris).
Resale ECs
Other buyers have flocked to purchase resale executive condominiums (EC) as they are affordable. As many as 720 units were transacted from January to May 2023, significantly higher than the 344 average sales recorded over the first five months of the past 13 years.
The buying trend was similar to the suburban private condo market, where resale ECs of at least 1,000 sq ft but less than 1,400 sq ft saw the highest transactions. These units had a median price of around $1.4 million.
In 2023, the best-selling resale ECs were Sol Acres in the Choa Chu Kang planning area, The Brownstone in Sembawang, The Criterion in Yishun, Bellewaters in Sengkang, Wandervale in Choa Chu Kang and Westwood Residences in Jurong West.
Freehold and leasehold condos below 30 years old
Freehold (37.6 per cent) and leasehold condominiums excluding EC (22.7 per cent) of at least 10 but less than 15 years old were most favoured as they constituted 60.3 per cent of the total non-landed resale transactions in 2023. For the latter category, buyers probably liked these homes for their generous living spaces as “older” homes are usually larger, yet the units are still relatively new with a long balance lease.
This was followed by condominiums that were at least five but less than 10 years old (9.7 per cent), 25 but less than 30 years old (9.5 per cent), and 15 but less than 20 years old (9.3 per cent).
The buying trend indicates that lease tenure remains important to many resale buyers. The golden years for leasehold condominiums could be below 30 since these units were most popular among buyers. This may also be the optimal holding period to maximise capital returns.
Sellers will likely find it easier to get a buyer, and the unit may fetch a good price, unless the home owner prefers to hold the unit until there is a potential collective sales windfall.
Luxury and new condos in prime districts
Buying interest in the prime segment remained resilient despite higher interest rates and two rounds of cooling measures implemented in December 2021 and September 2022. This is because the ranks of the ultra-wealthy with more than $50 million have swelled and have a strong intent to invest in real estate worldwide.
About 820 non-landed resale homes in CCR were sold between January and May 2023, up from 713 units in the first five months of 2019 and almost on par with the 872 units over the same period in 2022. About 68 per cent of this year’s transactions were in Districts 9 and 10 as more luxury homes were completed, such as Royalgreen, Petit Jervois and Juniper Hill.
At the upper end of the market, 22 non-landed resale homes in CCR of at least $10 million were sold in the first five months of 2023, more than the 17 units moved in 2022 and seven units during the pre-pandemic 2019 in the same five-month period.
Of the 22 transactions recorded this year, three were above $20 million at Nassim Park Residences and Skyline @ Orchard Boulevard. The other transactions were from developments like Sculptura Ardmore, Boulevard Vue, St Regis Residences Singapore, Scotts Highpark, New Futura and Paterson Suites. These units were as big as 240 to 717 sq m and were highly exquisite, stylishly designed and built by top developers.
Outlook
The resale market will likely see more sales activities as a bumper crop of around 19,000 landed, non-landed, and EC units will be completed this year. The plethora of newly completed units will push housing supply to a seven-year high which may help stabilise property prices.
We estimate that resale prices may rise slower by 5 per cent to 8 per cent in 2023, down from 8.7 per cent in 2022.
The flexible work model will continue to whet Singaporeans’ appetite for large homes, especially attractively priced suburban condos. About half of this year’s completions are in the OCR, which may ease some pent-up demand from HDB upgraders.
The large project completions include the 2,203-unit Treasure at Tampines, 1,468-unit Parc Clematis, 1,410-unit The Florence Residences, 820-unit Piermont Grand, and 680-unit Sengkang Grand Residences.
The growing wealth in Singapore and the wider region may drive demand further for luxury properties. Key project completions include Leedon Green, Kopar at Newton, One Holland Village, Cuscaden Reserve, and Haus on Handy.
Other luxurious properties boasting stunning interiors or are limited in quantity, design or space may also attract the ultra-rich.
The writer is the senior vice-president of OrangeTee & Tie Research & Analytics
https://www.straitstimes.com/business/invest/where-to-find-the-hot-resale-condo-units
The resale market will likely see more sales activities as around 19,000 landed, non-landed, and EC units will be completed in 2023.
Christine Sun
7 July, 2023
Resale properties are growing in popularity for their spaciousness and affordability. Demand has been rising as the median per square foot price gap between new and resale condos has continued to widen over the years.
In 2021, the price gap was 38.9 per cent, but this rose to 55.2 per cent in 2022 and 62.9 per cent in the first five months of 2023, based on the Urban Redevelopment Authority’s (URA) data.
In addition, more buyers have turned to the secondary market since the additional buyer’s stamp duty (ABSD) was raised. For instance, a Singaporean couple upgrading from a Housing Board flat to a $1.8 million new condominium unit must pay an ABSD of $360,000 if they were to keep the flat until the completion of the new home.
However, many buyers may not have the means to pay the ABSD upfront, even if they can apply for a remission after selling their flats. They must still set aside the budget for the down payment, buyers’ stamp duty and legal fees. Therefore, more HDB upgraders have bought resale properties since they are ready for immediate occupation.
With more resale condominiums being completed this year, how will prices and demand change? What types of resale homes are Singaporeans buying now?
Big suburban condos
Condominiums in the suburbs, especially the big units, are in the greatest demand now. Singaporeans have been snapping up larger suburban private homes as they need to set up dedicated workspaces or makeshift home offices in the era of hybrid work.
Further, there were few projects launched in the suburbs, leaving buyers with lesser housing options.
By region, the lion’s share of non-landed resale transactions was from the outside of central region (OCR), where 2,082 or slightly more than half of the total units changed hands from January to May 2023. Another 30 per cent were in the city fringes or the rest of central region (RCR), and 20 per cent were in the luxury segment or core central region (CCR).
Resale condominiums of 1,000 sq ft but less than 1,200 sq ft in OCR registered the highest transactions among the sub-markets, followed by 1,200 sq ft to less than 1,400 sq ft.
About 92 per cent of suburban condos between 1,000 sq ft and less than 1,400 sq ft were sold below $2 million, whereas 90 per cent of new condominiums in the same size range were transacted between $2 million and $3 million this year.
Places, where most suburban resale condominiums of between 1,000 and less than 1,400 sq ft took place, include District 19 (Hougang, Serangoon Garden and Punggol), District 16 (Bedok, Upper East Coast, Eastwood and Kew Drive), District 23 (Hillview, Bukit Panjang, Choa Chu Kang and Dairy Farm) and District 18 (Tampines and Pasir Ris).
Resale ECs
Other buyers have flocked to purchase resale executive condominiums (EC) as they are affordable. As many as 720 units were transacted from January to May 2023, significantly higher than the 344 average sales recorded over the first five months of the past 13 years.
The buying trend was similar to the suburban private condo market, where resale ECs of at least 1,000 sq ft but less than 1,400 sq ft saw the highest transactions. These units had a median price of around $1.4 million.
In 2023, the best-selling resale ECs were Sol Acres in the Choa Chu Kang planning area, The Brownstone in Sembawang, The Criterion in Yishun, Bellewaters in Sengkang, Wandervale in Choa Chu Kang and Westwood Residences in Jurong West.
Freehold and leasehold condos below 30 years old
Freehold (37.6 per cent) and leasehold condominiums excluding EC (22.7 per cent) of at least 10 but less than 15 years old were most favoured as they constituted 60.3 per cent of the total non-landed resale transactions in 2023. For the latter category, buyers probably liked these homes for their generous living spaces as “older” homes are usually larger, yet the units are still relatively new with a long balance lease.
This was followed by condominiums that were at least five but less than 10 years old (9.7 per cent), 25 but less than 30 years old (9.5 per cent), and 15 but less than 20 years old (9.3 per cent).
The buying trend indicates that lease tenure remains important to many resale buyers. The golden years for leasehold condominiums could be below 30 since these units were most popular among buyers. This may also be the optimal holding period to maximise capital returns.
Sellers will likely find it easier to get a buyer, and the unit may fetch a good price, unless the home owner prefers to hold the unit until there is a potential collective sales windfall.
Luxury and new condos in prime districts
Buying interest in the prime segment remained resilient despite higher interest rates and two rounds of cooling measures implemented in December 2021 and September 2022. This is because the ranks of the ultra-wealthy with more than $50 million have swelled and have a strong intent to invest in real estate worldwide.
About 820 non-landed resale homes in CCR were sold between January and May 2023, up from 713 units in the first five months of 2019 and almost on par with the 872 units over the same period in 2022. About 68 per cent of this year’s transactions were in Districts 9 and 10 as more luxury homes were completed, such as Royalgreen, Petit Jervois and Juniper Hill.
At the upper end of the market, 22 non-landed resale homes in CCR of at least $10 million were sold in the first five months of 2023, more than the 17 units moved in 2022 and seven units during the pre-pandemic 2019 in the same five-month period.
Of the 22 transactions recorded this year, three were above $20 million at Nassim Park Residences and Skyline @ Orchard Boulevard. The other transactions were from developments like Sculptura Ardmore, Boulevard Vue, St Regis Residences Singapore, Scotts Highpark, New Futura and Paterson Suites. These units were as big as 240 to 717 sq m and were highly exquisite, stylishly designed and built by top developers.
Outlook
The resale market will likely see more sales activities as a bumper crop of around 19,000 landed, non-landed, and EC units will be completed this year. The plethora of newly completed units will push housing supply to a seven-year high which may help stabilise property prices.
We estimate that resale prices may rise slower by 5 per cent to 8 per cent in 2023, down from 8.7 per cent in 2022.
The flexible work model will continue to whet Singaporeans’ appetite for large homes, especially attractively priced suburban condos. About half of this year’s completions are in the OCR, which may ease some pent-up demand from HDB upgraders.
The large project completions include the 2,203-unit Treasure at Tampines, 1,468-unit Parc Clematis, 1,410-unit The Florence Residences, 820-unit Piermont Grand, and 680-unit Sengkang Grand Residences.
The growing wealth in Singapore and the wider region may drive demand further for luxury properties. Key project completions include Leedon Green, Kopar at Newton, One Holland Village, Cuscaden Reserve, and Haus on Handy.
Other luxurious properties boasting stunning interiors or are limited in quantity, design or space may also attract the ultra-rich.
The writer is the senior vice-president of OrangeTee & Tie Research & Analytics
https://www.straitstimes.com/business/invest/where-to-find-the-hot-resale-condo-units