Condo resale volumes fall 29.9% in June; resale prices mixed based on regions

SINGAPORE – Condominium resale volumes fell in June, while resale prices posted mixed performances. 

Flash data from SRX and 99.co released on July 25 showed that resale volumes decreased 29.9 per cent month on month, and declined 5.2 per cent year on year. Around 809 units changed hands in June, down from the 1,153 units resold in May. 

The fall in month-on-month volume comes as condo resale volumes across the different regions fell, with the volumes in the outside central region (OCR) logging the largest month-on-month decrease at 37.5 per cent. 

However, resale volumes in June were 0.7 per cent higher than the five-year average volume for the month of June.

Deals in the OCR accounted for slightly more than half (50.5 per cent) of June’s total volume. This was followed by the rest of central region (RCR), which made up 31.7 per cent, and the core central region (CCR) at 17.8 per cent. 

Some market watchers attributed the decrease in sales volume to the June school holidays and the launch of Build-To-Order (BTO) HDB flats in more attractive locations.

OrangeTee Group’s chief researcher and strategist, Ms Christine Sun, said: “A decrease in June sales was not unexpected as many home owners typically go on vacation during the school holidays. This may result in fewer properties available for viewing and slower sales activities.”

However, the fall was “considerably more pronounced than anticipated”, she added.

Mogul.sg’s chief research officer, Mr Nicholas Mak, noted that two of the eight BTO projects launched in the previous month are in prime locations Tanjong Rhu and Holland Village. Other projects, such as those in Jurong and Tampines, are located near transport nodes.

This could have pulled demand away from the condo resale market, which led to a drop in the transaction volume.

Overall resale prices edged up 0.2 per cent from the previous month, and increased 4.3 per cent year on year. Resale prices posted mixed performances, however, when broken down by region. 

Prices for the RCR inched up 1.3 per cent in June, while those of the CCR decreased by 0.6 per cent. OCR resale prices remained stagnant.

Year on year, resale prices in the RCR were up 6.4 per cent, while OCR prices rose 5.7 per cent. In contrast, CCR resale prices decreased by 0.2 per cent. 

Huttons Asia’s chief executive officer, Mr Mark Yip, said: “Prices of resale condos in the CCR stayed soft due to lower demand from foreigners. The narrower price gap between resale and sub-sale condos in June saw more buyers gravitating to the sub-sale market.”

Sub-sale transactions accounted for 11.1 per cent of all secondary sales, marking a 3 percentage point increase from May.

These sub-sale deals are secondary sales made before the completion of a project. Secondary sales, on the other hand, comprise both resale and sub-sale transactions. 

The most expensive condo resold was a unit at Reflections at Keppel Bay which went for $13.6 million. In the CCR, the highest transacted price was $9 million for a unit at The Tate Residences. In the OCR, the top price was for a unit at Waterfront Key which resold for about $4 million. 

District 21 (Clementi Park and Upper Bukit Timah) posted the highest median capital gain at $685,000 and the highest median unlevered return at 43.5 per cent.  

Meanwhile, District 1 (Boat Quay, Raffles Place and Marina Bay) continued to record the lowest median capital gain at $3,000, and the lowest median unlevered return at 0.3 per cent.

Looking ahead, some market watchers expect possible interest rate cuts by the US Federal Reserve later in the year to have spillover effects in Singapore’s condo resale market.

PropNex’s head of research and content, Ms Wong Siew Ying, said: “Any rate cut would be welcomed by home buyers and home owners, and it could also bump up market confidence, as a decline in interest rates will help to improve affordability and lower monthly mortgage payments.”

She added that prospective buyers who had waited for lower borrowing costs might “return to the market to purchase a residential property in the months to come should interest rates moderate”.

THE BUSINESS TIMES