SINGAPORE - Resale condominium volumes and prices gained traction in March for a second straight month, as more buyers switched to resale properties after new private home prices grew at a much faster pace than those on the secondary market.

More resale condo units changed hands in March, with 1,133 units resold, representing a 53.9 per cent increase from 736 in February, according to flash figures from real estate portals 99.co and SRX released on Tuesday.

The price gap between non-landed new and resale homes widened further as new home prices jumped 30.5 per cent to $2,586 per sq ft (psf) in the first quarter of 2023 from $1,981 psf in the same period in 2022, while resale prices rose 14.1 per cent over the same period, noted Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.

As a result, the median prices of new private homes excluding executive condos (ECs) were 67.1 per cent higher than non-landed resales in the first quarter of 2023, up from 46 per cent in the same period in 2022, Ms Sun said.

Condo resale prices gained 1.4 per cent in March in tandem with higher demand. On a year-on-year basis, overall prices were up 8.6 per cent.

The prime district and city fringe areas also saw a bigger proportion of resale transactions in March from a year ago, while the suburbs saw a smaller proportion of resales. This is because prices in the suburbs grew the most year on year compared with the other two submarkets, said Mr Eugene Lim, key executive officer at ERA Realty Network.

Suburban resale condos saw the biggest jump in prices, up 11 per cent, followed by a 9.4 per cent gain in the city fringe. Prime district resale condo prices rose 4.1 per cent.

“Buyers are taking the opportunity to pick up prime district homes for their own stay or as longer-term investments,” said Mr Lim.

The increase in marginal buyer’s stamp duty rates from Feb 15 did not appear to have hurt demand for pricier resale condos, as resale homes that sold for $1.5 million and above accounted for 52 per cent of total resale volume for March – up from 48 per cent in February, said PropNex Realty head of research and content Wong Siew Ying.

But Ms Wong warned the rebound in February and March following four straight months of declining transactions after the September 2022 round of cooling measures may not be sustainable, as higher interest rates and slower economic growth weigh on sentiment.

Citing caveat data, PropNex noted that the number of resale home transactions has fallen for three straight quarters, starting in the third quarter of 2022, after a new round of cooling measures hit and interest rates began their ascent.

Resale condo volume slipped to 2,317 units in the first quarter of 2023 from 2,419 in the fourth quarter of 2022, and was down 19 per cent from 2,860 in the first quarter of 2022.

“We believe high interest rates have a bigger impact on the resale market, as these buyers are not shielded in the way new launch buyers are under the progressive payment scheme,” said Ms Wong.

This scheme allows buyers of new uncompleted homes to stagger mortgage payments, which will increase gradually as construction milestones for the project are met.

Meanwhile, the private resale market benefited from a spike in demand from foreign buyers, particularly from China and the United States, analysts say. Resales to foreign buyers jumped 60 per cent to 56 in March from 35 in February.

“As a result of the ongoing turmoil in China’s property market, some investors may be shifting their focus towards properties in Singapore,” said One Global Group senior analyst Mohan Sandrasegeran.

Also supporting the private resale market are Housing Board upgraders, foreign ultra-high-net-worth individuals who are relocating to Singapore, and tentative signs that interest rates may be stabilising, said Mr Mark Yip, chief executive at Huttons Asia.