Condo resale prices up 1.7% in September; volumes rise 1.1%: SRX, 99.co

Michelle Zhu
Published Tue, Oct 11, 2022 · 11:15 AM

CONDOMINIUM resale prices rose for the 26th straight month in September, increasing by 1.7 per cent over the previous month and 11.1 per cent year on year.

According to flash figures from SRX and 99.co published on Tuesday (Oct 11), prices for the outside central region (OCR) rose the most from the previous month at 2.2 per cent.

Resale prices for the Rest of the Central Region (RCR) and the Core Central Region (CCR) were up 1.3 per cent and 1.1 per cent, respectively, on a month-on-month basis.

All regions experienced year-on-year resale price increases with the OCR seeing the highest hike by 12.9 per cent. Condo resale prices in the RCR and CCR rose by 10.1 per cent and 7 per cent on-year respectively.

Mark Yip, chief executive of Huttons Asia, believes the recent launches of Sky Eden@Bedok and Lentor Modern - which are both in the OCR - helped to lift the region’s prices in September. He foresees condo resale prices continuing their growth in Q4 of 2022, with an overall increase of up to 15 per cent for the entire year.

The highest transacted price for a resale unit in September 2022 was S$17.6 million at Reflections at Keppel Bay. Within the CCR, a unit at Eden Residences Capitol resold at the highest transacted price of S$15.8 million, while a unit at The Trilinq resold for S$4.8 million to mark the OCR’s highest.

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Noting that condo resale prices have surged by 21.7 per cent from April 2020, 99 Group’s head of research Pow Ying Khuan observed a marked price growth of 26.2 per cent in the OCR ever since – compared to the RCR’s 19.1 per cent growth and the CCR’s 13.7 per cent.

“As downgraders are now excluded from buying a resale flat immediately, those who do not want to wait or rent may instead choose to downgrade to a condo that is more affordable, which could be older, smaller in size or in areas where prices are comparatively lower,” said Pow, referring to the latest set of cooling measures introduced by the government.

Implemented with effect from Sep 30, the measures include a 15-month wait-out period for private homeowners before they can buy a non-subsidised HDB (Housing Board) resale flat. 

Some 1,331 condo units were resold for all of September 2022, up 1.1 per cent from the 1,317 units resold in the previous month but 22.8 per cent lower than in September 2021.

The latest month’s volumes were 16 per cent higher than the five-year average volumes for the month of September.

60.9 per cent of September’s volumes were from the OCR, with 23 per cent from the RCR and 16.1 per cent from the CCR.

Going forward, 99.co’s Pow thinks the condo resale market could experience a knock-on effect from the recent wave of cooling measures.

In his view, the wait-out period, rising interest rates and a lower maximum loan quantum would make potential buyers think twice before committing to a condo purchase.

“If the cooling measures prove to slow down HDB resale price growth, it is highly likely that we will see fewer upgraders,” he added.

Likewise, OrangeTee & Tie’s senior vice president of research and analytics, Christine Sun, foresees a temporary pullback in housing demand for some HDB upgraders due to the 15-month wait-out period.

“Some of the affected private homeowners may turn back to the private resale market. Supply of new private homes in OCR will also continue to be limited. As a result, these factors may mitigate the slight dip in housing demand from the affected HDB upgraders,” added Sun.

She however believes that slightly older, yet bigger resale condo units may remain in demand given their affordability and spaciousness.

Observing that condo stock available for resale has been tight, PropNex Realty’s head of research and content, Wong Siew Ying, thinks the latest cooling measures could crimp supply further.

“In addition, owners of multiple residential properties may also be less inclined to sell since they would have to incur hefty additional buyer’s stamp duty if they wish to buy another residential unit later on.”

Wong nonetheless anticipates that many aspiring condo unit sellers will hold on to their asking prices given the limited stock of resale units in the market and the still-healthy buyer demand, particularly for larger units.

Some condo unit owners may also increasingly prefer to rent out rather than sell their properties in view of steady home leasing demand and strong rentals, she said.

“Landlords who are receiving the best rental returns from their residential investment properties in more than a decade would naturally be reluctant to sell their properties, especially if the tenant had recently renewed the lease at a higher rental rates,” commented Nicholas Mak, ERA Realty’s head of research and consultancy.

With fewer resale condos available for sale in the market, Mak expects transaction volumes to remain stable in the short term. 

The overall median capital gain for resale condos was 28.2 per cent for September, with District 25 (Admiralty / Woodlands) recording the highest median unlevered return at 44.4 per cent. At the other end of the spectrum, District 9 (Orchard / River Valley) posted the lowest capital gain at S$99,000.

Capital gains and returns of a condo resale unit are calculated by comparing the current transacted price with the previous transacted price of the same unit. Districts with fewer than 10 matching transactions are excluded from the ranking.

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