SINGAPORE - Condominium resale prices continued to climb for the fourth consecutive month in November, although volumes were muted after showing signs of recovery in October.
Flash data from real estate portals SRX and 99.co released on Dec 26 showed that overall resale prices rose 0.4 per cent in November from the month before, and were 7.4 per cent higher year on year.
Resale volumes, meanwhile, were muted, with 848 units changing hands in November, compared with 847 units resold in October. Year on year, volumes were 6.3 per cent higher, but 4.1 per cent lower than the five-year volumes for the month of November.
The launch of three major non-landed developments in November – J’den, Watten House and Hillock Green – had a spillover effect on the resale market, said Huttons Asia chief executive Mark Yip.
“Buyers who were priced out or didn’t manage to secure their ideal unit went to the resale market and pushed up volume slightly,” he added.
Ms Christine Sun, senior vice-president for research and analytics at property firm OrangeTee & Tie, attributed the increase in resale prices to the completion of many new condo units in recent months.
New homes tend to command higher prices, she noted, observing that the majority of these new condos were completed in the outside central region (OCR) or suburbs.
Based on SRX and 99.co data, the majority of resale condo transactions in November (47.2 per cent) took place in the OCR, followed by 33.9 per cent in the rest of central region (RCR) or city fringes and 18.9 per cent in the core central region (CCR) or prime areas.
In terms of resale prices, the CCR and OCR registered increases of 3.1 per cent and 0.9 per cent respectively. Resale prices in the RCR dropped 1.3 per cent month on month.
Mr Eugene Lim, key executive officer of property firm ERA Singapore, said the CCR had the highest number of recently completed homes that were sold, leading to stronger price growth in November.
Year on year, all regions recorded price increases. The OCR led gains at 10.7 per cent, followed by the RCR at 6.3 per cent and the CCR at 4.5 per cent.
The percentage of sub-sale transactions stood at 10.6 per cent, down from 12.5 per cent in October. Sub-sale transactions are secondary sale transactions before a project’s completion.
Real estate firm PropNex’s head of research and content Wong Siew Ying expects resale volumes to ease in December due to the year-end seasonal lull and festive period, when market activity tends to slow.
Mr Lim said some sellers could also take longer to find a buyer amid heightened competition.
He noted that investors would be faced with the burden of increased mortgage payments, higher property taxes and limited rental upside due to the increased competition for tenants.
“For those with limited holding power, it makes economic sense for them to offload their unit in the near term with resale prices holding firm,” he said.
The highest transacted price for a resale unit in November was $15.2 million for a unit at Nassim Jade in Nassim Road. In the RCR, the most expensive resale unit was $6.5 million for a unit at The Sovereign in Meyer Road, and $4.78 million for a unit at Clementi Park in Sunset Way in the OCR.
The overall median capital gain for resale condos fell to $330,000 in November, down $10,000 from the month before.
District 26 (Mandai and Upper Thomson) posted the highest median capital gain at $660,000, while District 1 (Boat Quay, Raffles Place and Marina) recorded the lowest median capital gain at minus $120,000.
District 23 (Bukit Batok, Bukit Panjang and Choa Chu Kang) recorded the highest median unlevered return at 54.4 per cent, while District 1 posted the lowest median unlevered return at minus 7.8 per cent.
Capital gains and returns of a condo resale unit are calculated by comparing the current transacted price with the previous transacted price of the same unit. Districts with fewer than 10 matching transactions are excluded from the ranking. THE BUSINESS TIMES
