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Condo resale transactions rebound by 22.5 per cent, as prices hit new high in July estimates

SINGAPORE — Private condominium resale prices hit a record in July, growing by 1 per cent compared with the previous month despite the tighter Covid-19 measures in the second half of July.

Condo resale transactions rebound by 22.5 per cent, as prices hit new high in July estimates

Flash estimates from property portals 99.co and SRX showed that 58 per cent of the 1,817 resale transactions in July 2021 came from condominiums outside the central region of Singapore.

  • An estimated 22.5 per cent more resale deals were completed in July compared with June
  • The prices of resale condos also grew 1 per cent from June, and 8 per cent year-on-year
  • One condo in unit in Tanglin fetched a resale price of S$18.5 million
  • Analysts believe rising volumes and prices are partly due to people moving from public to private housing after selling their flats in a buoyant HDB resale market

 

SINGAPORE — Private condominium resale prices hit a record in July, growing by 1 per cent compared with the previous month despite the tighter Covid-19 measures in the second half of July.

Advance data released on Tuesday (Aug 10) by property portals 99.co and SRX also showed that on a year-on-year basis, overall resale prices grew by 8 per cent in July.

A unit at Le Nouvel Ardmore in Tanglin was sold for S$18.5 million, which was the highest resale price of a condo unit in July.

An estimated 1,817 condo units exchanged hands in July, about 22.5 per cent more than the 1,483 sold in June.

The volume of resale transactions in July was 68.2 per cent higher than in the same month last year, and 83 per cent higher than the average number of transactions seen in July over the past five years.

Property watchers said that the higher prices of resale condos were reflective of Singapore’s counterintuitive real estate boom during the pandemic, including the rising prices seen in the Housing and Development Board (HDB) resale market as well as the higher launch prices for recent new condominiums.

WHAT THE DATA SHOWS

While the prices of resale condos have been climbing steadily since July last year, the total number of resale transactions have been falling over the past three months.

July’s preliminary data, however, shows that the market may have reversed this decline in transaction volume.

Mr Mark Yip, chief executive officer of realtor Huttons Asia, said: “Despite the curbs on viewings from July 22, transaction volume in July resumed to the level in March and April where there were no restrictions.”

There were 1,901 resale transactions in March and 1,992 transactions in April.

The worsening Covid-19 situation here in July had prompted the authorities to lower the cap for the number of unique household visitors a day from five to two, which had an impact on home viewings. The cap was raised to five unique visitors a day from Aug 10.

Preliminary data showed that more than half (58 per cent) of the 1,817 resale transactions in July came from condos outside the central region of Singapore.

Another 17.9 per cent involved resale condos in the core central region, and around 24 per cent were units in the rest of central region.

Mr Nicholas Mak, head of research and consultancy at ERA Realty, noted that the resale price expansion of condos in the core central region and rest of central region were marginal, growing by 0.1 and 0.3 per cent on a month-on-month basis respectively.

“It was the healthy 1.6 per cent month-on-month growth of condominium prices in the suburban places outside the central region that pulled up the overall condo price index,” he said.

WHY THIS IS HAPPENING

Mr Mak explained that the robust HDB resale market was partly the reason for the increase, especially in these suburban areas.

“Some owners of HDB flats are taking advantage of the high prices of HDB resale flats and cashing out to upgrade to private condos,” he said.

HDB resale prices have climbed around 3 per cent per quarter over the past three quarters, which could be due to the slowdown in the construction of new Build-To-Order HDB flats.

If this trend continues, prices for resold HDB flats are likely to post a record high in the second half of this year.

Mr Mak added that most of the buyers of resale condos in the suburban areas are Singapore residents who are buying them as homes to live in, rather than for speculative investment.

“Hence, an increase in the demand for such suburban housing is a healthy sign as such demand is more sustainable.”

Mr Yip of Huttons Asia said that the surge in resale transactions for the whole of July could also be due to some buyers rushing to complete deals before tighter restrictions kicked in on July 22.

He reasoned that buyers could be seeking more affordable options in the condo resale market as opposed to HDB resale and new condos, noting that the prices of mass market homes in condos outside the central region rebounded in July after easing for two quarters.

Ms Christine Sun, OrangeTee and Tie’s senior vice president of research and analytics, agreed that home buyers could have decided to take the plunge and buy a private property since property prices were “rising across the board”.

She pointed out that the steep 1.6 per cent jump in prices outside the central region in July compared with June was likely due to the low supply of such units relative to units in the other regions.

Independent property analyst Ong Kah Sen said this meant that on a year-on-year basis, the resale prices of condos outside the central region have climbed by 7.7 per cent.

“This is quite a hefty price increase within a year,” he said.

OUTLOOK

The experts said that the resale condo prices could continue to rise in the coming months, since the supply of new private homes continues to be limited.

And with the buoyant HDB resale market likely to remain for some time, HDB upgraders could turn to the private resale market and continue to drive up prices.

Mr Yip of Huttons Asia said that an estimated 29,000 HDB flats may be resold this year and these sellers may take the opportunity to upgrade to private housing. This is higher than the 24,748 HDB units resold in 2020 and the 23,714 units transacted in 2019.

Mr Mak of ERA said that there could be a slowdown in resale transactions in August since people normally avoid closing such deals during the Hungry Ghost Festival, but that the rising resale trend will continue in September. The Hungry Ghost Festival, which lasts from Aug 8 to Sept 6 this year, is generally considered an inauspicious period to buy property for some Chinese believers.

He noted that some developers had recently raised the prices of remaining unsold housing units in their private residential projects following the launch of Pasir Ris 8 condo in late July, which could spill over to the resale condo market.

“In the absence of any government intervention, the SRX resale condo price index would continue to appreciate and could end the year with a 10 to 15 per cent year-on-year increase,” Mr Mak forecasted.

Related topics

condominium property resale prices Covid-19

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