SINGAPORE – Prices of resale condominium units in January dipped for the first time in more than two years, as fewer units changed hands during the Chinese New Year seasonal lull period.
Overall condo resale prices fell by 0.6 per cent compared with December, when prices rose 0.7 per cent, according to flash figures from real estate portals 99.co and SRX released on Monday.
Prior to January’s downturn, condo resale prices had been rising for 29 consecutive months since August 2020.
Property analysts attribute January’s dip in prices to the seasonal slowdown in sales activities, which was compounded by limited supply as owners held off on selling and the high interest rate environment, although it remains to be seen whether the price decline will continue in the months to come.
One Global Group senior analyst Mohan Sandrasegeran said fewer high-value transactions were observed in January, and a shift in interest towards the Housing Board resale segment could be among the reasons for the price decline.
Buyers who were unable to find suitable options in the private resale market may have turned to the HDB resale market to make the most of their budget, said Mr Sandrasegeran.
“Due to the rising preference for larger living spaces, the HDB resale market serves as a viable option for this group of buyers, who are looking for larger living spaces at a more affordable price point than what is available in the private resale market,” he said.
In addition, foreigners are showing more interest in new condo launches than resale condo units, which could further drain the pool of potential buyers for the private resale market, said Mr Sandrasegeran.
In January, prices in central Singapore rose by 2.5 per cent, while those in the city fringes fell by 0.2 per cent, and those in the suburbs dropped by 1.2 per cent.
PropNex Realty head of research and content Wong Siew Ying said it is likely that steady new home sales in central Singapore in recent months have helped to lift resale prices in the same sub-market.
Meanwhile, the number of units sold dropped for the fourth consecutive month in January on the back of property cooling measures, which came into effect in September 2022.
Data showed that an estimated 519 units were resold in January, a 22.6 per cent decrease from the 671 units resold the month before.
Volumes were down 43.2 per cent compared with a year before, and 35.5 per cent lower than the five-year average volumes for the month of January.
OrangeTee & Tie senior vice-president of research and analytics Christine Sun said transactions may continue to be muted in the months to come as fewer sellers have put up their units for sale.
“With prices remaining elevated, especially new home prices, the replacement cost of a home is high. Furthermore, some home owners may be inclined to keep their units for rental income since rents remain firm,” she said.
ERA Realty head of research and consultancy Nicholas Mak said the drop in prices in January is likely only a “temporary correction” as there is still a steady demand for private residential properties among locals and foreigners, especially with the reopening of China’s borders.
He noted that there are about 30 new private residential projects slated to be launched in 2023, which is twice the number of projects launched in 2022.
These upcoming projects will typically be launched at higher prices compared with the nearby older properties, hence new launches could prop up the overall private property market, added Mr Mak.
“Any price decline in 2023 will be short-lived and could be a buying opportunity for home buyers,” he said.
The highest transacted price for a resale condo unit in December was $15.5 million at Boulevard Vue, a freehold development in the Tanglin/Holland area.
In the city fringes, the highest transacted price was $4.5 million for a 99-year leasehold unit at Reflections at Keppel Bay in the HarbourFront area. In the suburbs, a 99-year leasehold unit at The Palette in Pasir Ris sold for $2.73 million.