Condo resale volumes recover in October while prices stay on uptrend: SRX, 99.co
CONDOMINIUM resale transactions were back on the growth track in October after the previous month’s volume decline.
Based on flash data from SRX and 99.co, 838 units changed hands for the month, up 14.7 per cent from the 731 units resold in the previous month.
This nonetheless represented a 9.2 per cent decline from the same period a year earlier, and was down 12.7 per cent from five-year average volumes for the month of October.
The month-on-month recovery is also expected to be “short-lived” ahead of an anticipated lull period nearing the year’s end, said 99.co’s chief data and analytics officer Luqman Hakim.
Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, also highlighted the possibility of resale transactions declining over the next two months due to the year-end holidays. “Many Singaporeans would be travelling overseas, resulting in fewer house viewings. However, there could be a resumption in resale transactions in January as buyers return to the market after the holiday period.”
The percentage of sub-sale transactions to secondary sale transactions stood at 11.7 per cent, down 0.8 per cent from the prior month.
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Sub-sale transactions refer to secondary sale transactions prior to a project’s completion, while secondary sale transactions comprise both resale and sub-sale transactions.
Huttons Asia’s chief executive Mark Yip reckoned that the continued drop in the proportion of sub-sales came as the level of asking prices were “pushing close to some new project launches, and too far away from resale prices”.
He added: “Buyers have either switched over to new project launches or bought a resale condo.”
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While the overall condo resale volume for October 2023 remains low, prices rose yet again on the back of sustained growth in the Outside Central Region (OCR) and Rest of the Central Region (RCR).
Hakim of 99.co, however, noted a “trend reversal” for September’s Core Central Region (CCR) index, from 0.5 per cent to minus 0.1 per cent, due to new transactions on low volume.
Huttons’ Yip said: “The CCR is still reeling from the shock of a doubling in Additional Buyer’s Stamp Duty for foreigners, with prices declining 1.5 per cent in October 2023. However, some astute buyers are taking this opportunity to hunt for a CCR home, and that has pushed up the volume by 25.4 per cent in October.”
Overall prices for October grew by 0.4 per cent month on month, and 7.5 per cent year on year, with all regions experiencing price increases. OrangeTee & Tie’s Sun attributed the continued price growth in October to more newly completed condos in the suburbs and city fringes, which are “usually sold at higher price premiums than older condos”.
On the other hand, Huttons’ Yip pointed out that October’s month-on-month increase marked the smallest monthly gain since January 2022.
This comes as buyers of resale condos are resisting higher prices and adjusting their budget as the mortgage interest rates continue to stay high, he noted.
On a year-on-year comparison, OCR prices booked the largest price increase by percentage at 10.4 per cent, followed by 8 per cent in the RCR and 2.3 per cent in the CCR.
The highest transacted price for a resale unit in October was in the CCR, where a unit at Bishopsgate Residences sold for S$22 million.
Within the RCR, the highest transacted price was S$7.4 million for a unit at Amber Skye, while another unit at Ocean Park which resold for S$5.27 million took the top spot within the OCR.
Eugene Lim, key executive officer of ERA Singapore, believes OCR and RCR resale prices could see accretive growth in the coming months, as a slew of new home completions are expected to result in more sale listings in the market. This could, in turn, drive price competition among sellers amid a tighter pool of buyers.
The overall median capital gain for resale condos rose to S$350,000 in October 2023, up S$6,000 from the prior month’s levels.
Districts 15 (East Coast/Marine Parade) and 20 (Ang Mo Kio/Bishan/Thomson) posted the highest median capital gain at S$667,000, while District 1 (Boat Quay/Raffles Place/Marina) booked the lowest median capital gain at minus S$98,000.
Meanwhile, District 16 (Bedok/Upper East Coast) posted the highest median unlevered return at 50.4 per cent, and District 1 (Boat Quay/Raffles Place/Marina) booked the lowest median unlevered return at minus 6.6 per cent.
Capital gains and returns of a condo resale unit are calculated by comparing the current transacted price with the previously transacted price of the same unit.
Districts with fewer than 10 matching transactions are excluded from the ranking.
Huttons’ Yip said: “As the year comes to a close, the resale market may also take a breather. Price gains may be capped at around 8 per cent in 2023.”
OrangeTee & Tie’s Sun said that she remains “cautiously optimistic” on the outlook for the resale market next year, though she expects robust demand and fewer project completions to prop up prices for 2024.
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