Condo Resale Prices Edge Up in September, Volumes Dip Amid New Launches: SRX, 99.co

Month-on-month, overall prices rise by 0.8%

October 24, 2024

CONDOsingapore.com

Condo resale volumes in Singapore dipped in September, a decline analysts attribute to new project launches in the private market and increased public housing options.

According to flash estimates released by SRX and 99.co on Thursday (Oct 24), approximately 1,026 units were resold in September, marking a 5.3% decrease from the 1,084 units transacted in August.

Christine Sun, chief researcher and strategist at OrangeTee, noted, “The lower sales could be influenced by the anticipation of several new project launches lined up from September to November, which have expanded homebuyers’ choices in the primary market.”

Similarly, Luqman Hakim, chief data and analytics officer at 99.co, highlighted the impact of public housing options. “The ongoing October Build-To-Order (BTO) exercise, featuring highly desirable flats in prime locations, might attract some first-time buyers, particularly those who meet the income criteria, away from the condo market,” he said.

Other analysts suggested that buyers may have been waiting for further interest rate cuts by the US Federal Reserve before committing to purchases. Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc, said, “Buyers may have been hoping for more favourable mortgage rates, prompting them to delay their decisions until there was greater clarity on the direction of interest rates.”

Despite the monthly dip, resale volumes in September were 35.8% higher year-on-year and 4% above the five-year average for the month. By region, the Outside Central Region (OCR) accounted for 52.6% of transactions, followed by the Rest of Central Region (RCR) at 29.9%, and the Core Central Region (CCR) at 17.5%.

Overall resale prices rose by 0.8% month-on-month and 4.4% year-on-year. Mark Yip, CEO of Huttons Asia, observed that despite the lower volume, prices increased at their fastest pace since April 2024. In the first nine months of 2024, resale condo prices have climbed by 3.2%.

Breaking it down by region, CCR prices rose by 0.2% month-on-month, while OCR prices increased by 1.2%. Prices in the RCR remained unchanged.

Wong Siew Ying, head of research and content at PropNex, pointed out that while resale condo prices have inched up, the median unit price gap between new non-landed private homes and resale homes remains significant. “Based on URA Realis caveat data, the median price per square foot (psf) gap was 45% in September, widening from previous months when it hovered between 30% and 38%,” she said.

Wong expects the “sizeable price gap” between new and resale properties to support the private resale market in the coming months. Year-on-year, prices rose by 1.6% in the CCR, 5.4% in the RCR, and 5.5% in the OCR.

Meanwhile, the proportion of sub-sale transactions to total secondary sales fell to 7.6% in September, down 1.2% from August.

The highest transacted price for a resale unit in September was S$10.3 million for a unit at The Orchard Residences. The overall median capital gain stood at S$366,000, up S$5,000 from August. District 10 (Tanglin/Holland/Bukit Timah) recorded the highest median capital gain at S$802,000, while District 1 (Boat Quay/Raffles Place/Marina) posted the lowest at S$16,000.

The overall median unlevered return for resale condos was 30.5% in September. District 21 (Clementi Park/Upper Bukit Timah) achieved the highest median unlevered return at 54.5%, while District 1 posted the lowest at 1%.

Looking ahead, OrangeTee’s Christine Sun cautioned that resale activities could decline further as the year-end approaches, as buyers and sellers may travel during the holiday season, leading to fewer transactions. However, she remains optimistic that sales could rebound after the lull period, especially if the US Federal Reserve announces additional rate cuts in the coming months.