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Singapore condo resale volumes recovering with prices stable in June: SRX

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Resale prices of non-landed private homes were stable in June, with sales volume recovering from the previous month, according to flash figures from real estate portal SRX Property on Tuesday.

RESALE prices of non-landed private homes were stable in June, with sales volume recovering from the previous month, according to flash figures from real estate portal SRX Property on Tuesday. 

An estimated 497 units were resold last month, representing a 174.6 per cent increase, or more than double the 181 units resold in May this year. However, last month's resale volume is 26.3 per cent lower than in June 2019, and a 40.7 per cent drop from the five-year average volume for the month of June. 

Christine Sun, head of research and consultancy at OrangeTee & Tie, noted that the rebound in sales is "within expectation", given that house viewings resumed after the "circuit-breaker" period ended last month. 

Last week, the SRX flash estimate for the HDB resale market reflected a similar surge in sales, where close to seven times more flats were sold in June compared with May. 

Ms Sun added that the private resale market picked up quickly last month due to the use of technological tools. "Virtual house tours and e-open houses have helped to speed up the buying process for some buyers, as they could select and shortlist units remotely prior to the resumption of house viewings," she said. 

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Overall, condo resale prices last month remained unchanged over May. They were 0.6 per cent lower than in June 2019. 

Month on month, prices in the core central region declined 1.8 per cent, and prices in the rest of central region or city fringes fell 1.1 per cent, while prices outside the central region rose 1.4 per cent in June this year. 

According to Ms Sun, with lower sales inked in previous months, the price gap expectation seemed to have narrowed as more buyers and sellers were willing to negotiate prices. "This may also explain why more deals were closed in recent weeks, as both parties were willing to lower their price expectations," Ms Sun said. 

Separately, SRX data showed that the highest transacted price for a resale unit last month came from an apartment at Skyline @ Orchard Boulevard, which went for S$12.2 million.

In June, SRX's overall transaction over X-value (TOX) came in at negative S$10,000, unchanged from May 2020. 

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.

District 23 (Dairy Farm, Bukit Panjang, Choa Chu Kang) posted the highest median TOX at positive S$5,000, while District 9 (Orchard, River Valley) recorded the lowest median TOX at negative S$80,000.

Nicholas Mak, head of research and consultancy at ERA Realty, said the latest flash estimates showing that Singapore's gross domestic product contracted 12.6 per cent in Q2 from a year ago, could slow down the rate of increase in condo resale volume. 

Nonetheless, the large number of HDB resale flats that would be eligible to be sold on the resale market could spur upgraders' demand, he said.

"These 26,000 new HDB flats would reach the end of their five-year minimum occupation period in 2020. To avoid paying additional buyer's stamp duty, these HDB flat owners would need to buy a completed resale condo for their own use after selling their HDB flats. Therefore, the transactions of resale condominium could still continue to rise in the coming months," Mr Mak added. 

He estimates that 8,000 to 10,000 private condo units could be transacted in the resale market for the whole of 2020.

Meanwhile, resale condo prices could remain flat with a slight downwards bias, due to uncertainties in the economy and employment market, said Mr Mak.

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