Condo resale prices rise 0.4%; volumes increase in March

After a seasonal slowdown in February, condominium resale sales rose 17.4% in March. This was the highest in seven months.

Flash data released on April 25 by SRX and showed that in March 883 units changed hands, compared to 752 in February.

However, resale volumes in March were down by 12,8 per cent compared to the previous five-year average.

Property analysts cited the possibility of a rebound in sales due to the resumed launches that took place during the month. This had a spillover impact on the resale sector.

Some current condo owners might have bought a second condo to avoid ABSD. Some buyers have done a comparison of condos for sale and selected a resale.

Analysts have also noticed an increase in purchases made by foreigners this month due to the increased viewing during the Chinese new year period.

Some of the viewings in March may have resulted in purchases.

Data from URA Realis shows that the number of condos sold to non-permanent residents (foreign buyers) has increased from 0.5 to 1.3% of the total volume of resale.

Analysts say that, despite a slight increase in transactions in March owing to a mismatch of expectations in terms of pricing, this could be a factor in the future.

Observations indicate that, while many sellers are willing to negotiate, they do not want to significantly lower their asking prices, especially given the high price of a replacement home.

In February, foreign buyers accounted for 0.5 percent of all resale private home transactions. This month they accounted for 1.3 percent. The number of resale deals to foreigners was 11 in absolute numbers. Of these, six were with buyers from the US and three from China. One each came from Norway and Switzerland.

Prices for resale meanwhile remained flat, with a 0.4 percent increase on the monthly basis, but were 5% higher year over year.

Rents are falling and interest rates are rising, which is a double blow to property investors who plan to use rental income to pay mortgage payments.

Outside Central Region, which recorded a growth of 1.6 percent in resale price, was the region with the largest gains.

The price increase is not surprising, considering that more suburban launches have occurred in the past few months and most new homes are priced above S$2,000/square foot.

The rest of Central Region (RCR), which includes the Rest of Central Region and the Rest of Central Region, saw a rise of 1,2%. Resale prices fell by 2.8% in the Core Central Region.

In all regions, resale price increases were higher than the same period in last year. The OCR led the way with a 7.1% increase, followed by RCR at 5.6%, and CCR at 1.5%.

A majority of transactions (48%), followed by a third (31.6%), took place on the OCR. The CCR accounted 20.2 per cent for total resale volume.

Noteworthy, only 8.1% of secondary sales were sub-sale deals, down by 4.3 points from February.

Chuan Park

SRX & stated that the percentage was at its lowest in 12 months.

Sub-sale agreements are sales made after a project is completed, whereas secondary sale transactions include both resale (sale) and sub-sale (sale).

The highest transaction price in March for a unit in Corals Keppel bay in the RCR was S$8.7m.

In the CCR the highest condo deal involved a unit in Astrid Meadows that changed hands for S$7.1million. The highest transaction price in the OCR was S$3.4million, for a Seaside Residences unit.

The median capital gain on resale condos was S$380,000, an increase of S$20,000 in March.

District 11 had the highest median gain in capital at S$823,000. District 1 posted a capital loss median of S$63,000.

District 26 registered the highest median nonlevered (debtfree) return, at 63.3 percent. Meanwhile, District 1 experienced a negative median nonlevered return of -5.7 per cent.

Comparing the current price of a condo unit with its previous price is the way capital gains are calculated. Districts with less than 10 matching transactions will be excluded from the rankings.

error: Content is protected !!