Condo resale volume recovered in June

Updated from : The Straits Times15 July 2020

More private non-landed homes were resold last month compared with May, while prices held for a third consecutive month as Singapore gradually reopened its economy after a two-month circuit breaker, according to flash data released yesterday.

The number of condominiums and private apartments resold increased to an estimated 497 units last month, a 174.6 per cent increase from the 181 units moved in May, the flash figures from real estate portal SRX Property showed.

Still, last month’s resale volume was 26.3 per cent less than in the same month last year and 40.7 per cent lower than the five-year average volume for the month.

Head of research and consultancy at OrangeTee & Tie Christine Sun said the sales volume recovery was within expectations, given that house viewings resumed after the circuit breaker ended last month.

Ms Sun noted that the private resale market picked up quickly due to “technological tools” which helped buyers shortlist their options during the circuit breaker.

“Virtual house tours and ‘e-open houses’ helped to speed up the buying process for some as they could select and shortlist units remotely prior to the resumption of house viewings.”

Last week, the SRX flash estimate for the Housing Board resale market reflected a similar rebound, where close to seven times more flats were sold last month compared with May.

ERA Realty head of research and consultancy Nicholas Mak noted that the rebound for resale condominiums was “less spectacular” compared with that of the HDB resale market.

This could be because more first-time home buyers would buy an HDB flat than a private condominium unit as the HDB flat is more affordable, he said.

“HDB flat buyers would feel a sense of urgency to buy their first homes. By comparison, some of the buyers of private resale condominium units are HDB upgraders… There is a lower sense of urgency among these buyers.”

Overall, prices remain unchanged month on month over May. Year on year, overall prices dipped by 0.6 per cent last month.

Last month’s resale prices for units in the core central region (CCR) and rest of central region (RCR) decreased over May by 1.8 per cent and 1.1 per cent respectively. Units in the outside central region (OCR) increased by 1.4 per cent.

Over half of the units resold last month were located in the OCR, at 52.3 per cent. Units in the CCR and the RCR made up 27.4 per cent and 20.3 per cent respectively.

071520 - Condo sale in June 2020

Last month’s overall SRX’s transaction over X-value (TOX) data stood at a negative $10,000, no change from May’s number.

TOX measures how much a buyer is overpaying (positive value) or underpaying (negative value) for a property based on SRX’s computer-generated market value. The data includes only districts with more than 10 resale transactions.

District 23 (Dairy Farm/Bukit Panjang/Choa Chu Kang) posted the highest median TOX at positive $5,000, followed by District 3 (Alexandra/Commonwealth) at zero TOX. The lowest median was found in District 9 (Orchard/River Valley) and District 16 (Bedok/Upper East Coast) at negative $80,000 and negative $38,000 respectively.

The highest price for a resale unit last month was the $12.2 million paid for a unit at Skyline @ Orchard Boulevard.

Mr Mak said resale condominium transaction volumes could continue to rise in the coming months, as 26,000 HDB flats complete their five-year minimum occupation period this year.

This would likely spur some upgraders’ demand for a completed resale condominium after the sale of their HDB flats to avoid paying the additional buyer’s stamp duty.

Mr Mak estimates 8,000 to 10,000 units to be transacted for this year, while prices could remain flat with a slight downward bias.