Condo resale volumes fall 17.9% in April, prices rise 1.2%: SRX, 99.co

May 30, 2023

PRIVATE condominium resale volumes fell in April while prices rose, according to flash estimates from SRX and 99.co released on Tuesday (May 30).

Resale transactions for condominium units totalled 919 in April, a 17.9 per cent decrease from the 1,119 units resold in March.

Sales volumes were 29.7 per cent lower than they were in the same month a year ago, and 12.9 per cent lower than the five-year average volumes for the month of April.

More than half of April’s transactions were in the Outside Central Region (OCR), while 30.2 per cent were in the Rest of Central Region (RCR). Core Central Region (CCR) units constituted 17.8 per cent of total deals.

Huttons Asia chief executive officer Mark Yip noted that the launch of new projects may have pulled some demand away from the resale market in April. New launches Blossoms by the Park and Tembusu Grand were the best-selling private residential projects that month.

ERA’s key executive officer Eugene Lim noted that the progressive payment scheme for new projects allows homebuyers to hedge against the current high interest rate environment, as home loans will typically kick in about one to 1.5 years down the road from the launch.

In April, condo resale prices rose by 1.2 per cent month on month. In the CCR, prices rose by 2.3 per cent. Prices in the RCR rose by 1.7 per cent, while OCR prices dipped by 0.3 per cent.

On a year-on-year basis, overall condo resale prices rose by 8.7 per cent, with increases of 3.8 per cent in the CCR, 9.9 per cent in the RCR, and 9.5 per cent in the OCR.

Luqman Hakim, chief data and analytics officer at 99.co, said: “It is expected that these price increases may slow or stabilise if corresponding resale volumes continue to fall in the coming months.”

The highest transacted price in April stood at S$18 million for a resale unit at Sculptura Ardmore. It was purchased by a Chinese foreign national, Huttons’ Yip noted.

There were 42 caveats lodged for resale condominium purchases by foreigners in April, according to data from the Urban Redevelopment Authority (URA).

Singaporean buyers made up 76 per cent of condo resale caveats in April – the highest proportion in the first four months of 2023, PropNex Realty’s head of research and content Wong Siew Ying said.

“With the recent Additional Buyer’s Stamp Duty (ABSD) rate hike from 30 per cent to 60 per cent for foreigners, we may see fewer private non-landed resale caveats from foreign buyers in the coming months,” she added.

In the RCR, the highest transacted price was for a unit at Reflections at Keppel Bay, which was resold for S$7.9 million. A unit at Ocean Park topped the OCR price chart at S$3.68 million.

The overall median capital gain for resale condos was S$314,000 in April – an increase of S$8,000 from the month before.

The overall median unlevered return for resale condos stood at 27 per cent. District 11 had the highest median unlevered return at 38.3 per cent, while District 2 had the lowest.

Wong expects condo resale volumes to remain limited, which could continue to put a drag on resale market activity.

“Although more private homes are projected to be completed this year, many of these units will likely be for own stay or to be tenanted to garner rental income. Therefore, the oncoming new completions may not necessarily lead to a big increase in resale condo stock.”

Some owners of multiple properties may also not be keen to sell their investment property, which they might have bought before ABSD was introduced in December 2011, she noted.

“If they sell their condo now, they will have to pay a much higher ABSD should they decide to buy another residential property subsequently. In addition, with the still-healthy home rental market, many of these owners have opted to lease out the unit.”

ERA’s Lim said he expects that as more new launches are sold at benchmark prices, resale homeowners are likely to increase their selling prices in tandem.

“They would need to price their units higher in order to purchase a replacement home,” he said.

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