Buyers back in condo resale market

Number of private non-landed homes resold in July up 31% but prices inch down

Transactions of resale private condominiums have risen steadily in recent months as buyers return to the market. PHOTO: ST FILE

Transactions of resale private condominiums have risen steadily in recent months as buyers return to the market.

An estimated 770 non-landed private homes were resold last month, up a whopping 31.4 per cent from the 586 units moved in the same month last year, said SRX Property yesterday.

The sharp increase underlines a trend of increasing sales, although prices have taken a slight dip.

June's sales were up 27.4 per cent on the same month last year while May's transactions were 35.3 per cent more year on year.

July's turnover was 10 per cent up on the 700 units sold in June.

Analysts told The Straits Times yesterday that sales have risen as more buyers realise that prices are unlikely to see a sharp drop and that the property cooling measures are here to stay, at least in the near term.

"They have played a wait-and see strategy for some time now and with prices consolidating, they have made their moves... We expect the resale market to be more active in the second half," said PropNex Realty chief executive Ismail Gafoor.

The Government has said cooling measures will stay, with Monetary Authority of Singapore managing director Ravi Menon reiterating the point only last month.

Real estate agency OrangeTee said another reason for the pick-up in resales is the lower number of new residential project launches this year.

"Due to the narrowing of choices in the primary market, some buyers have focused their search towards the resale market, where they may enjoy stronger negotiating power and find better deals," noted Mr Wong Xian Yang, head of research and consultancy at OrangeTee.

Resale prices dipped by 0.4 per cent in July from June - snapping four straight months of price gain. This followed a revised 0.4 per cent increase in resale prices in June.

The decline last month hit all market segments. Prices slipped 0.5 per cent from June to July in the core central region, 0.6 per cent in the city fringe and 0.3 per cent in the suburban areas.

Overall resale prices for non-landed private homes rose 0.1 per cent in July over the same month last year.

Analysts say the resale property market remains in a "consolidation" phase, with marginal price movements. R'ST Research director Ong Kah Seng noted: "The July price fall shows we cannot read March to June's price increase as sure signs of resale property prices set (for a recovery)."

One statistic that stood out in the latest set of data was the 6.2 per cent increase in resale prices in the core central region in July over the previous year. Analysts said prices of luxury homes were likely supported by an uptick in demand.

"High-net-worth Singaporeans and foreigners continue to see rising value proposition for luxury homes in Singapore after a prolonged two-year period of price declines. (They) have possibly returned to pick up units," said PropNex's Mr Ismail.

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A version of this article appeared in the print edition of The Straits Times on August 11, 2016, with the headline Buyers back in condo resale market. Subscribe