Condo resale sales rebounded in March, price increasing 0.4%

In March, condo resale prices rose by 17.4%, the highest rate in seven-months, after buyers returned to a market that had been lulled for a few months due to a seasonal slump.

Flash data from SRX &, released Thursday (25 Apr), showed 883 units resold compared with 752 units in February.

Sales volumes were still 22.8 percent lower year over year (yoy), but they were 12 percentage points lower than March’s five-year volume average.

According to property analysts, the possible reasons for the volume increase include the resumption in launches throughout the month. The result is a spillover on the secondary market.

It is possible that some condo owners bought a new condominium and sold their old one to avoid the ABSD (Additional Stamp Duty) for the second residential property. Some buyers made comparisons and chose a pre-owned condo.

Analysts also reported an increase in the number of purchases by foreigners as the viewings for the Chinese New Year increased.

Several of these viewings might have translated into purchases in March.

Lentor Mansion

In February, data from URA Realis showed that foreign buyers (nonpermanent resident) accounted for 1.3 percent of all resale transactions. This is up from the 0.5 percent in January.

Analysts are concerned that the mismatching of price expectations may have an impact on the transactions, despite the slight rise in activity seen in March.

Observations show that while sellers are generally open to negotiating, they don’t want to drop their price too much, considering the high cost to replace a home.

In addition, the percentage of resale home sales to foreigners rose from 0.5 to 1.3 percent in February. On a monthly basis, 11 resale sales were made to foreigners – six to US buyers, 3 to Chinese, and 1 each to Norway and Switzerland.

In the meantime, resale prices remained tepid, only rising 0.4 per cent in a month, though they were up 5 per cent yoy.

The double hit of rising interest rates and falling rental income for property investors looking to use their investment condo unit’s rental income to cover mortgage payments is the result of both.

Outside Central Regions (OCR) recorded the largest price increases, with an increase of 1.6% in resale.

The higher price growth is not surprising given the increased suburban launches over the last months, and that most new homes were transacted at a median price above S$2,000 per sq. foot.

Resale Prices in the Rest of Central Region RCR grew by 1.2%. Resale price in the Core Central Region decreased by 2.8 percent from the previous period.

All regions have seen an increase in the resale of homes compared with last year. The OCR continued its lead with a gain 7.1%. Next was the RCR which saw prices rise by 5.6%. Finally, the CCR had prices increase by 1.5%.

The RCR was the site of the majority (48.2%) of the transactions. CCR volume accounted for 20.2% of total resale.

It is notable that sub-sale sales accounted for just 8.1% (down 4.3%) of all secondary purchases in February.

SRX & Co. claimed that this was the lowest percent in the last 12 months.

Sub-sale deals are those made prior to the completion of an undertaking, whereas secondary sales include both resale or sub-sale.

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The highest sale price for a condo unit in Keppel Beach in the RCR in March was S$8.7million.

The highest price condo sale in the CCR involved an Astrid Meadows unit that sold for S$7.1 Million. For the OCR, a unit at Seaside Residences sold for S$3.4 million.

The median capital gain of resale apartments in March was S$380,000, an increase by S$20,000 compared to the previous month.

The median capital gain for District 11 was S$823,000. Meanwhile, District 1 had a median loss of S$63,000.

District 26 posted the highest median (debt-free), unlevered returns at 63.3 percent, while district 1 reported a median negative unlevered return (5.8 per cent).

Capital gains on a condo-resale are calculated by comparing the price at which the unit was sold to the price it had been sold for in the past. Districts where there are fewer 10 transactions matching the district’s criteria are excluded.

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