Condo resales rebound, with July volume nearly double that of June

Pent-up demand during circuit breaker helps push up numbers

In the rest of central region, the highest transacted price was $5.85 million for a unit at Reflections at Keppel Bay (above), while Skyline @ Orchard Boulevard once again took the top spot for the highest transacted price, with a unit resold for $14
In the rest of central region, the highest transacted price was $5.85 million for a unit at Reflections at Keppel Bay (above), while Skyline @ Orchard Boulevard once again took the top spot for the highest transacted price, with a unit resold for $14.99 million. ST PHOTO: GAVIN FOO

The volume of resale condominiums changing hands nearly doubled last month, with about 978 units sold compared with 496 units in June.

Resale volume last month was up 10 per cent from July last year, and 9.3 per cent higher than the five-year average volumes for the month of July, according to real estate portal SRX Property's flash estimates released yesterday.

Just over half of the units sold last month were located in the outside central region (OCR).

Units in the rest of central region (RCR) and core central region (CCR) accounted for 27.8 per cent and 18.6 per cent, respectively.

ERA Realty's head of research and consultancy Nicholas Mak said the transaction volume last month showed that the condominium resale market had made a full recovery from the effects of the circuit breaker.

He added that there had been pent-up demand during the circuit breaker period from April 7 to June 1.

In addition, he said, a large number of Housing Board flats had reached the five-year mark and become eligible to be sold in the open market.

"These flats, which have completed the five-year minimum occupation period (MOP) in 2019 and 2020, would result in growing buying demand (for private property) from HDB upgraders," he said.

"Some of these flat owners would need to buy completed resale condominiums for their own stay, hence contributing to the increase in resale condominium transactions."

An average of 26,600 additional HDB flats hit the five-year mark in each of the two years. This is triple the annual average of 8,800 HDB flats that fulfilled the MOP from 2008 to 2018.

Overall, condominium resale prices rose 0.1 per cent month on month over June.

However, year on year, overall prices were down 0.1 per cent last month. July prices for CCR and RCR resale units decreased by 1.7 per cent and 1.4 per cent, respectively. Units in the OCR rose by 1.6 per cent.

PropNex Realty's head of research and content Wong Siew Ying said the price trends continue to reflect the resilience of the OCR, or mass market, segment.

In this segment, prices tend to be more stable as they are supported by healthy demand from a larger pool of upgraders and owner-occupiers.

"In contrast, CCR and RCR resale prices could face more pressure amid a crisis as these regions boast pricier properties and would appeal to a relatively smaller group of buyers and investors compared with the mass market segment," Ms Wong said.

OrangeTee & Tie's head of research and consultancy Christine Sun said some buyers may find the current pricing level comfortable enough to enter the market, fearing a price rise later. "Others may view the current market slowdown to be an opportunity to negotiate a better deal with sellers," she added.

She said buyers are going for more affordable resale properties below $1.5 million.

According to URA Realis data, 61.9 per cent of non-landed resale homes sold last month were below $1.5 million, compared with 48.7 per cent in June this year and 56.3 per cent in June last year.

Skyline @ Orchard Boulevard once again took the top spot for the highest transacted price, with a unit resold for $14.99 million.

 
 

In the RCR, the highest transacted price was $5.85 million for a unit at Reflections at Keppel Bay.

As for the OCR, the highest transacted price was for a unit at Ocean Park, which was resold for $2.8 million. July's overall SRX transaction over X-value (TOX) data stands at negative $10,000, no change from the figures for June and May.

TOX measures how much a buyer is overpaying (positive value) or underpaying (negative value) for a property based on SRX's computer-generated market value.

The data covers districts with more than 10 resale transactions.

District 18 (Pasir Ris/Tampines) posted the highest median TOX at positive $9,500, followed by District 16 (Bedok/Upper East Coast) at positive $5,000.

The lowest medians were found in District 4 (Sentosa/HarbourFront) at negative $90,000 followed by District 10 (Tanglin/Holland/Bukit Timah) at negative $70,000.

ERA's Mr Mak said resale condominium transaction volume could return to a monthly sale volume of between 600 and 1,100 units in the coming months, assuming the Covid-19 pandemic is managed well in Singapore.

But he added that economic uncertainties would put a cap on property prices, causing the resale condominium price index to vary between +1.5 per cent and -1.0 per cent year on year for 2020.

A version of this article appeared in the print edition of The Straits Times on August 12, 2020, with the headline 'Condo resales rebound, with July volume nearly double that of June'. Print Edition | Subscribe