According to flash estimates from SRX and 99.co released on April 25th, resale prices and volumes of condominiums saw a further increase in March, with strong demand for units in the Outside of Central Region (OCR).
Resale prices rose by 1.4% month on month and 8.6% year on year. Property analysts attributed the uptick to the return of buyers to the market after the year-end holidays and Chinese New Year period. They also noted an increase in purchases by foreigners.
According to Huttons Asia's CEO Mark Yip, demand for resale condominiums may be supported by HDB upgraders and foreign ultra-high-net-worth individuals relocating to Singapore.
In March, the number of resale condo transactions increased by 53.9% to 1,133 units compared to 736 units resold in February 2023. Year-on-year volumes saw a slight increase of 0.2%, and were 13.9% higher than the five-year average for the month of March.
Resale prices rose by 1.4% month-on-month and 8.6% from the previous year, with almost half of all transactions occurring in the OCR, followed by 28.8% in the Rest of the Central Region (RCR) and 21.4% in the Core Central Region (CCR). The surge in demand is attributed to the return of buyers after the year-end holidays and Chinese New Year period, as well as an increase in purchases by foreigners.
The resale market for condominiums in Singapore continued to thrive in March, driven by strong demand for properties located in the OCR. Resale prices in all regions increased year-on-year, with the OCR experiencing the highest price gain of 11%, followed by RCR with 9.4% and CCR with 4.1%. Resale prices in the OCR rose the most in March, increasing by 2.1%, while the RCR rose by 1.6%. However, resale prices in the CCR fell by 0.7%.
The number of resale transactions increased by 53.9% from February to March, with the OCR accounting for almost half of all resale deals. Although the OCR recorded the most sales, other regions also saw a significant increase in transaction volume, particularly in the CCR.
Property analysts attributed the rise in the resale market to demand from HDB upgraders and foreign ultra-high-net-worth individuals relocating to Singapore. They also observed that buyers with cash and liquidity have been taking advantage of the opportunity to acquire prime properties for their own stay or as longer-term investments. Some buyers may have turned to the secondary market due to the widening price gap between new and resale condos, said Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics.
According to data from the Urban Redevelopment Authority Realis, the difference between the median prices of non-landed new sales (excluding executive condos) and their resale equivalents has widened further. Sun observed that the price gap was 67.1% in March, compared to 46% in the year-ago period.
In addition, the prices of new condos rose faster than resale condos, with a 30.5% year-on-year increase in Q1 2023, compared to 14.1% for resale condos over the same period.
Meanwhile, the most expensive resale unit sold in March was a unit at Nassim Park Residences, which went for S$22 million. In the RCR, a unit at Reflections At Keppel Bay transacted at S$17 million, and in the OCR region, a unit at The Trilinq sold for S$4.1 million.
The median capital gain for resale condos rose to S$311,000 in March, up from S$13,000 from February. District 11 (Novena, Newton, and Thomson) had the highest median capital gain at S$654,000, while District 2 (Chinatown, Tanjong Pagar) had the lowest capital gain at S$43,000.
The impact of high interest rates on the resale market is a topic of debate among property analysts. Wong Siew Ying, who heads research and content at PropNex, believes that there will be a significant impact. She points out that resale buyers do not have the same protection as buyers of new launches, who can benefit from progressive payment schemes.
Progressive payment schemes enable buyers of new uncompleted homes to gradually increase their mortgage payments over time as certain construction milestones are achieved. However, Mark Yip, CEO of Huttons Asia, notes that rates for the Singapore Overnight Rate Average (SORA) have stabilized after the US Federal Reserve indicated that rate hikes are coming to an end. This may provide support to the resale market in the upcoming months.