SINGAPORE - The strong momentum in the private condominium resale market continued in February, with growth in both prices and sales volume.
Resale prices rose 1 per cent in February from January, climbing for a seventh straight month, according to flash data from real estate portal SRX on Wednesday (March 10). Year on year, resale prices have increased by 4.4 per cent over February 2020.
Sales volume increased month on month by 0.4 per cent to 1,399 units. This also made February the eighth straight month where more than 1,000 resale units were sold.
Last month's sales volume was also 126 per cent higher than a year ago, and 101.9 per cent more than the five-year average volume for the month of February.
Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said the higher sales came as a surprise as sales activities typically slow down during the Chinese New Year period.
"In contrast, sales of new private condominiums dipped last month," she added.
Ms Sun said more buyers are considering resale condominiums as prices of new homes have been holding firm despite the pandemic.
"Some new projects had even increased their selling prices over the past few months. There are also fewer mega launches, especially in the mass market segment," said Ms Sun.
She added that the balance unsold stock of many launched projects is fast diminishing, resulting in buyers being unable to find suitable units and turning to the resale market instead.
Likewise, ERA Realty head of research and consultancy Nicholas Mak noted that the price increase last month was broad-based, across all three market segments, from the prime districts to the suburbs.
He said: "Other than the fear of missing out (FOMO) and low interest rates, the price growth of resale condo was also driven by the relatively higher prices of new residential launches, which has a positive spillover effect on the surrounding older residential properties."
PropNex head of research and content Wong Siew Ying said a sizeable pool of Housing Board flat owners completing their five-year minimum occupation period this year might also be considering to upgrade to a private home, especially if their flat can fetch healthy profits in the HDB resale market.
Ms Sun said that although resale prices have been rising, there is still a wide price gap between new and resale condominiums which will keep some resale condominiums attractive to buyers.
"The price disparity also indicates that there is still a good potential upside for many resale condominiums and some are currently undervalued," she said
Ms Wong said: "Given the sustained demand for resale properties and the improved market sentiment, we expect resale prices to remain relatively stable, with a potential for a slight uptick this year."
The highest transacted price for a private resale flat last month was $25 million for a unit at The Marq on Paterson Hill, SRX data showed.
The highest price in the city fringes was $5.1 million for a unit at Camelot By-The-Water in Tanjong Rhu Road. A unit at Tierra Vue in St Patrick's Road was resold for $2.7 million, the highest price in the outside central region.