September condo selling prices increased little, although volumes decreased due to new launches: 99.co and SRX

Overall prices are up 0.8% month over month.

October 24, 2024

CONDOsingapore.com





September saw a decline in condo sales volumes, which some experts attributed to the introduction of new private market projects and an increase in public housing choices.

Approximately 1,026 units were resold, which is a 5.3% drop from the 1,084 units sold in August, according to flash estimates from SRX and 99.co that were made public on Thursday, October 24.

"The lower sales could be influenced by the anticipation of several new project launches lined up from September to November, where buyers have an increased array of home choices in the primary market," said Christine Sun, OrangeTee's chief researcher and strategist.

Similarly, 99.co's chief data and analytics officer, Luqman Hakim, said that the reduction may have been caused by public housing possibilities.

"Some first-time buyers, especially those who meet the income criteria, may be drawn away from the condo market by the ongoing October Build-To-Order exercise, which features extremely desirable apartments in prime locations," he added.

Other experts pointed out that before making a choice, purchasers may have waited for the US Federal Reserve to decrease interest rates further.

"Buyers may have been hoping for more favourable mortgage rates, prompting them to delay their purchase decisions until there was more clarity on the direction of interest rates," said Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc.

Volumes for the month of September were 4% higher than the five-year average and 35.6 percent higher year over year. The Outside Central Region (OCR) accounted for more than half (52.6%) of the transactions by region, followed by the Rest of Central Region (RCR) with 29.9% and the Core Central Region (CCR) with 17.5%.

Overall, prices increased 4.4% from September 2023 and 0.8% from August.

The CEO of Huttons Asia, Mark Yip, observed that prices increased at their quickest rate since April 2024 in spite of the decreased volume. The cost of resale condominiums has increased by 3.2% in the first nine months of this year.

The CCR and OCR saw monthly price increases of 0.2% and 1.2%, respectively. The RCR's prices didn't alter.

While resale condo prices have somewhat increased, the median unit price difference between new non-landed private residences and resale homes is still rather large, according to Wong Siew Ying, head of research and content at PropNex.

This occurs at a time when new project launches often result in higher pricing. "The median (price per square foot) was 45 percent in September, which is higher than the previous months when the price gap was between 30 and 38 percent," she added, citing URA Realis caveat statistics.

Wong also anticipates that the private resale market would be supported over the coming months by the "sizeable price gap" between non-landed new and resale homes.

Prices for CCR, RCR, and OCR increased 1.6%, 5.4%, and 5.5%, respectively, year over year.

In contrast, the proportion of sub-sale transactions to all secondary sale transactions decreased by 1.2% from August to 7.6% in September.

The highest amount ever paid for a resale apartment at The Orchard Residences in September was S$10.3 million.

In September, the median total capital gain was S$366,000, up S$5,000 from the month before. District 1 (Boat Quay/Raffles Place/Marina) had the lowest median capital gain at S$16,000, while District 10 (Tanglin/Holland/Bukit Timah) recorded the most at S$802,000.

In September, the median unlevered return on resale condominiums was 30.5% overall. District 1 (Boat Quay/Raffles Place/Marina) had the lowest median unlevered return at 1%, while District 21 (Clementi Park/Upper Bukit Timah) had the greatest at 54.5%.

As year-end draws near, OrangeTee's Sun issued a warning that resale activity may continue to fall. This is because there may be fewer transactions throughout the holiday season due to customers and sellers travelling.

She is optimistic that sales might pick up after the slowdown, however, particularly if the US central bank announces further rate reduction in the next months.