Pricier, new condo launches drove resale market in January: analysts

NEW condominium launches drove demand for units in the secondary market in January, with resale units being relatively more affordable, said analysts.

The comments came as condo resale prices rose for the sixth straight month in January 2021, flash figures from real estate portal SRX Property showed on Tuesday.

Overall prices were up 1.2 per cent from December 2020, and 2.2 per cent higher compared to January 2020, according to flash figures from the real estate portal.

Christine Sun, OrangeTee & Tie senior vice-president of research and analytics, said some buyers have turned to the resale market as prices of new homes have been climbing in recent months. "Many buyers are entering the resale market now as they may be expecting prices to rise further since many global economies, including Singapore, are likely to perform better this year," she said. 

Wong Siew Ying, PropNex head of research and content, said in view of underlying demand, resale prices could continue to inch up, but likely at a slower pace compared to new launches. 

All regions saw price increases month on month, SRX said. The core central region (CCR) rose by 0.4 per cent, the rest of central region (RCR) or city fringes gained 1.9 per cent, while the outside of central region (OCR) advanced 1.1 per cent.

A NEWSLETTER FOR YOU

Tuesday, 12 pm

Property Insights

Get an exclusive analysis of real estate and property news in Singapore and beyond.

Sign Up

Year on year, the RCR and OCR were up 1.7 per cent and 3.3 per cent respectively, while the CCR dropped 0.4 per cent.

Resale volume was up 8.6 per cent to about 1,587 units resold in January 2021, from 1,461 units resold in December 2020. Volumes were 128.3 per cent higher than in January 2020 and 136.5 per cent higher than the five-year average volumes for the month of January.

By region, 8.2 per cent of resale volumes in January 2021 came from the OCR, 25.7 per cent from the RCR and 16 per cent from the CCR.

Nicholas Mak, ERA Realty's head of research and consultancy, attributed the growth in resale volume to the healthy underlying demand for private homes from both upgraders and investors. 

Fears of another round of property market cooling measures also drove resale volumes, he said. On Jan 18, Deputy Prime Minister Heng Swee Keat and National Development Minister Desmond Lee separately said the government is keeping a close watch on the market to ensure housing prices remain stable and affordable. 

According to SRX, a unit at Le Nouvel Ardmore fetched the highest transacted price of S$17.7 million in the month. The most expensive unit in the RCR was S$5.9 million for a unit at The Interlace. In the OCR, the highest transacted price was S$3.3 million for a unit at Waterview.

SRX said the overall transaction over X-value (TOX) for January 2021 was S$16,000, S$1,000 higher than a month ago.

District 21 (Clementi Park and Upper Bukit Timah) posted the highest median TOX at positive S$38,000. District 17 (Changi Airport and Changi Village) posted the lowest median TOX at negative S$8,000.

TOX measures how much a buyer is overpaying (positive value) or underpaying (negative value) for a property based on SRX's computer-generated market value. The data includes only districts with more than 10 resale transactions.

READ MORE: More expecting government intervention to cool Singapore's property market