Condo resale volumes post slight improvement in February amid CNY lull: SRX, 99.co

RESALE prices and volumes recorded a slight improvement in February, but continued to be muted against the backdrop of Chinese New Year festivities.

Flash data from SRX and 99.co released on Tuesday (Mar 26) showed that resale volumes inched up 1.2 per cent month on month to 760 units resold after falling in January.

Year on year, volumes were up 0.9 per cent and were 5 per cent higher than the five-year average volumes for the month of February.

Property analysts from OrangeTee and Huttons Asia attributed the uptick in demand to the absence of new project launches in the market, which led buyers towards the secondary market.

Christine Sun, chief researcher and strategist at OrangeTee Group, said: “Demand for resale properties may strengthen in the upcoming months, should interest rates moderate, enhancing housing affordability and attracting more buyers to the market.”

Resale prices, meanwhile, edged up 0.2 per cent on the month but rose 6.1 per cent year on year.

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The Core Central Region (CCR) and Outside Central Region (OCR) rose by 0.2 per cent and 0.1 per cent, respectively, while resale prices in the Rest of Central Region (RCR) stayed flat.

Compared with the same period last year, OCR prices led gains at 7.6 per cent, followed by the RCR at 6.1 per cent and CCR, which rose 2.8 per cent.

Around 43.8 per cent of total resale volumes were from the OCR, followed by 35.6 per cent from the RCR and 20.5 per cent from the CCR.

Sub-sale transactions accounted for 11.1 per cent of all secondary sales, down 1.2 percentage points from December 2023.

Sub-sale deals refer to secondary sales made before a project’s completion, while secondary sale transactions comprise both resale and sub-sale transactions.

Mark Yip, Huttons Asia chief executive, said: “Demand shifted to resale condos, which were cheaper than sub-sale condos. That may have capped prices in February 2024.”

ERA key executive officer Eugene Lim believes the housing market is at an inflection point.

“Prospective homebuyers are spoilt for choice in today’s market, given the plethora of housing options. Even so, this has not translated into significant price cuts, as sellers contend with higher costs for replacement homes and mortgage rates, and would rather wait for more attractive offers,” he added.

The highest transacted price for a resale unit in February was S$12.9 million for a unit at Ardmore Park.

In the RCR, the most expensive unit resold was at The Interlace, which changed hands for S$5.3 million. In the OCR, the highest transacted resale price was S$3.3 million for a unit at Kew Green.

The overall median capital gain for resale condos rose to S$368,000 in February, up S$21,000 from the month prior.

District 15 (East Coast, Marine Parade) posted the highest median capital gain at S$725,000, while District 1 (Boat Quay, Raffles Place, Marina) recorded a median capital loss of S$85,000.

District 22 (Boon Lay, Jurong, Tuas) recorded the highest median unlevered return at 57.1 per cent, while District 1 recorded a negative median unlevered return of 2.4 per cent.

Capital gains and returns on 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.

Looking ahead, 99.co chief data and analytics officer Luqman Hakim expects resale volumes to pick up in the following months based on an observed rise in condo resale listings in recent months.

Echoing the sentiment, PropNex head of research and content Wong Siew Ying believes the pickup could start from the second quarter of 2024 as more buyers return to the market.

“With prices finding stability in recent months, it could encourage buyers to return to the resale market,” she said.

Having a stable market would be beneficial for buyers looking to upgrade or rightsize their homes, as it gives them more time to sell their existing property, while allaying concerns that resale prices would rise rapidly and, in turn, price them out of buying their desired replacement unit, she added.