Prices rise 0.4% in March as condo resale volume increases

The condominium resale volume rebounded by 17.4 percent in March. It reached its highest level in 7 months as buyers returned to market after a seasonal slump in February.

Data released by SRX on Thursday, April 25, showed that 883 units had been resold compared to the 752 that were sold in February.

The resale volume was however 22,8% lower year-on-year (yoy) and 12 percent lower than the average five year volumes for March.

Analysts believe that the recovery in volume could be due to the return of launches, which has a ripple effect on the resale markets.

Some condo owners have chosen to sell their condos and buy a new one, in order to avoid paying ABSD (Additional Purchaser’s Stamp Duty). Some buyers might have compared condos and decided to buy a resale.

Analysts noted an increase in foreign purchases during the month, as viewings of the Chinese New Year period increased.

Some of these viewings could have led to purchases in March.

According to data from URA Realis, and research, the percentage of condo homes sold to foreign buyers (non permanent residents) increased to 1.3 percent of the total resale volumes, from 0.5 percent in February.

Analysts believe that despite the slight increase in activity in March, the mismatch between expectations and actual pricing could have a negative impact on transactions.

Many sellers are open to negotiation, but not willing to reduce their asking price significantly, given the high costs of replacing homes.

The proportion of non-landed private homes sold to foreigners in resale transactions increased to 1.3% of the total resale volume for the month, up from 0.5% in February. There were 11 transactions in absolute terms to foreign buyers this month. Six were to US buyers, three were to Chinese buyers, and two each to Norwegian and Swiss buyers.

The resale price increase was a modest 0.4 percent on the month, but 5 percent higher year-over-year.

Investors who want to pay their mortgages with the rental income from an investment condo are being hit by both high interest rates as well as falling rents.

Outside Central Region (OCR) registered the highest gains in prices, with a 1.6% increase in resale values.

Emerald of Katong

It is not surprising that prices have risen faster, as there have been more launches of suburban homes in the last few months. The median price for most new homes has also risen above S$2,000 a square foot.

In the Rest of Central Region, prices for resale goods increased by 1.2 percent. Resale Prices in the Core Central Region (CCR), on the other hand, declined by 2.8% from the previous months.

All regions saw an increase in resale prices compared to last year’s same period. This was led by the OCR with an increase of 7.1%, followed closely by the RCR where prices rose 5.6% and the CCR where prices increased 1.5%.

Most transactions (48% of all sales) were made in the OCR. The RCR accounted for 31%. CCR represented 20.2 percent of the total volume of resale.

Sub-sale transactions only represented 8.1% of all secondary sales in March, a drop of 4.3 percentage points since February.

SRX and reported that this was the lowest percentage for 12 months.

Sub-sale sales are secondary sales that occur before the completion of a project, while secondary sale deals include both resale as well as sub-sale.

The highest price transacted in March was S$8.7million for an apartment at Corals Keppel Bay, RCR.

The most expensive condo transaction in the CCR was a unit sold at Astrid Meadows for S$7.1million. In the OCR the highest price transacted was S$3.4million for a unit in Seaside Residences.

In March, the median capital gains for resale condominiums were S$380,000. This was up S$20,000 over the previous month.

The District 11 recorded the largest median capital gain of S$823,000 while the District 1 experienced a loss in capital of S$63,000.

District 26 had the highest median return (debt free) at 63.3 percent, while District 1 had a negative median return of 5.8 percent.

Calculating capital gains and returns for a condo resale is done by comparing current transaction price to previous transaction price. Districts that have fewer than ten matching transactions are not included in the ranking.

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