Condo resales rebound after circuit breaker; July volume nearly double that of June

11 Aug 2020
Property News
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Resale volume in July was up 10 per cent from July last year.ST PHOTO: KUA CHEE SIONG

The volume of resale private non-landed homes nearly doubled in July, with about 978 units sold compared to 496 units in June.

Resale volume last month was up 10 per cent from July last year, and 9.3 per cent higher than the five-year average volumes for the month of July, according to real estate portal SRX Property flash estimates released on Tuesday (Aug 11).

Just over half of the units sold last month were located in the outskirts of the central region (OCR).

Units in the rest of central region (RCR) and core central region (CCR) had accounted for 27.8 per cent and 18.6 per cent respectively.

Mr Nicholas Mak, ERA Realty head of research and consultancy, said the transaction volume last month showed the condo resale market has made a full recovery from the effects of the circuit breaker.

He added that there was pent-up demand during the circuit breaker period from April 7 to June 1.

In addition, Mr Mak said a large number of Housing Board flatshad reached the five-year mark, which meant they were eligible to be sold in the open market.

"These flats, which have completed the five-year minimum occupation period (MOP) in 2019 and 2020, would result in growing buying demand (for private property) from HDB upgraders.

"Some of these flat owners would need to buy completed resale condominiums for their own stay, hence contributing to the increase in resale condominium transactions," Mr Mak said.

An average of 26,600 additional HDB flats hit the five-year mark in each of the two years.

This is triple the annual average of 8,800 HDB flats to fulfil the MOP in the 10-year period from 2008 to 2018.

Overall, condo resale prices rose 0.1 per cent month on month over June. However, year on year, overall prices were down0.1 per cent last month.

July prices for CCR and RCR resale unitshad decreased by 1.7 per cent and 1.4 per cent respectively.

Units in the OCR had increased by 1.6 per cent.

Head of research and content at PropNex Realty Wong Siew Ying said the price trends continue to reflect the resilience of the OCR or mass market segment.

In this segment, prices tend to be more stable as they are supported by healthy demand from a larger pool of upgraders and owner-occupiers.

"In contrast, CCR and RCR resale prices could face more pressure amid a crisis as these regions boast pricier properties and would appeal to a relatively smaller group of buyers and investors as compared to the mass market segment," Ms Wong added.

Head of research and consultancy at OrangeTee & Tie Christine Sun said some buyers may find the current pricing level comfortable enough to enter the market, fearing a price rise later.

 

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"Others may view the current market slowdown to be an opportunity to negotiate a better deal with sellers."

Ms Sun added that buyers are going for more affordable resale properties below $1.5 million.

According to URA Realis data, 61.9 per cent of non-landed resale homes sold last month was below $1.5 million, compared to 48.7 per cent in June and 56.3 per cent in June 2019.

Skyline @ Orchard Boulevard once again took the top spot for the highest transacted price, with a unit resold for $14.99 million.

In the RCR, the highest transacted price was $5.85 million for a unit at Reflections at Keppel Bay.

As for the OCR, the highest transacted price was for a unit at Ocean Park, which was resold for $2.8 million.

July's overall SRX transaction over X-value (TOX) data stand at negative $10,000, no change from June and 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 cover districts with more than 10 resale transactions.

District 18 (Pasir Ris / Tampines) posted the highest median TOX at positive $9,500, followed by District 16 (Bedok / Upper East Coast) at positive $5,000.

The lowest medians were found in District 4 (Sentosa / Harbourfront) at negative $90,000 followed by District 10 (Tanglin / Holland / Bukit Timah) at negative $70,000.

Looking forward, ERA's Mr Mak said resale condo transaction volume could return to a monthly sale volume of between 600 and 1,100 units in the coming months, assuming the coronavirus crisis is managed well in Singapore.

He added, however, that economic uncertainties would put a cap on property prices, causing the resale condo price index to vary between +1.5 per cent to -1.0 per cent year on year for 2020.

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