Resale condo prices rise for 18th straight month

But January figures show volumes down 23.8% after cooling measures, with pre-holiday lull: SRX, 99.co

Feb 16, 2022

COOLING measures, combined with the lull period leading up to Chinese New Year, likely led to resale condominium demand slipping in January, noted property analysts on Tuesday (Feb 15).

Flash figures from SRX Property and 99.co showed resale volumes falling for the fifth consecutive month to 1,118 units resold - 23.8 per cent lower than the 1,468 units resold in December 2021.

Volumes were 23.1 per cent lower year on year and 26.9 per cent higher than the 5-year average volumes for the month of January.

The cooling measures - introduced in mid-December - possibly led to some buyers temporarily putting off their decision to purchase a residential property and waiting to assess the impact of the new measures on the resale market, said PropNex Realty head of research and content Wong Siew Ying.

Foreigners and investors seem to be taking a wait-and-see approach as they were more affected by the new cooling measures, said Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.

That being said, resale prices continued to rise for the 18th straight month in January 2022. Overall condo resale prices rose by 0.4 per cent month on month and increased by 9.2 per cent year on year.

All regions saw gains, with the outside of central region (OCR) registering the highest increase at 0.5 per cent, followed by the core central region (CCR) at 0.3 per cent and the rest of central region (RCR) at 0.1 per cent. Year on year, the OCR, CCR and RCR rose 10 per cent, 9.7 per cent and 7.5 per cent respectively.

ERA Realty Network head of research and consultancy Nicholas Mak said the price index could continue to rise in the short term even after the property market curbs. In the absence of an economic recession, it would take months before cooling measures affect property prices.

"Most property sellers will not reduce their asking prices immediately after the introduction of the cooling measures. Hence, buyers who need to purchase condo units urgently may not have the upper hand in their price negotiation with the sellers," Mak added.

Huttons Asia chief executive Mark Yip said the rise in resale prices could be due to sellers having stronger bargaining power because of a better financial position and limited new supply in view of construction delays.

By region, nearly two-thirds or 64.2 per cent of resale volumes were for transactions in the OCR, 21.2 per cent for the RCR and 14.5 per cent for the CCR.

The demand for OCR resale condominiums likely came from owner-occupiers and Housing Board (HDB) upgraders, noted Wong. She expects HDB upgraders to continue helping to boost condo resale demand this year.

Moreover, more than 31,000 HDB units are expected to reach their 5-year minimum occupation period this year. This may see some families taking the opportunity to swap their flat for a private condo.

The most expensive resale condo resold was S$14.1 million for a unit at Hilltops. In the RCR, the highest transacted price was S$11 million for a unit at Reflections At Keppel Bay, while the OCR's most expensive resale condo was S$4 million for a unit at Elliot At The East Coast.

99.co and SRX said the overall median capital gain for January 2022 was S$261,250, representing a S$44,250 increase from a month ago.

District 21 (Clementi Park and Upper Bukit Timah) posted the highest median capital gain of S$570,000 while District 12 (Balestier and Toa Payoh) posted the lowest median capital gain at S$122,000.

99.co and SRX calculates capital gain or loss of a condo resale unit by comparing the current transacted price with the previous transacted price of the same unit. Capital gain data only includes districts with more than 10 matching transactions.