30/08/2023
Condo resale prices dip for second straight month even as 4% more units sold in July
SINGAPORE – Condominium resale prices dipped in July for the second consecutive month, in what property analysts said is an early sign of prices stabilising amid a cloudy economic outlook.
Prices dipped by 0.2 per cent in July, following a drop of 0.1 per cent in June, according to flash figures from real estate portals 99.co and SRX released on Tuesday.
More specifically, the prices of condo units in the city fringes and suburbs that changed hands decreased slightly by 0.2 per cent, while those in the prime district rose by 1.1 per cent.
The number of units resold increased by 4 per cent, from 804 in June to an estimated 836 in July.
Analysts attributed the dip in private home prices to the impact of higher mortgage rates and April’s property cooling measures, which included the doubling of the additional buyer’s stamp duty (ABSD) rate for foreigners buying residential properties from 30 per cent to 60 per cent.
An analyst said the uncertain economic outlook may have led to more intensive negotiation for some budget-sensitive buyers, which resulted in softer prices in July while others noted that home buyers are becoming more cautious and discerning in their property purchases, given the elevated interest rates and relentless increase in home prices.
Some prospective buyers could also be waiting to see how prices will land in the next few quarters before they enter the market, said one.
While condo resale prices have dipped for the second month, the drop is too marginal to be considered a price correction, said another market observer.
Instead, it is an early sign of prices stabilising – largely due to a ramp-up in supply as more condo units are completed, she added.
Analysts also noted that some buyers may have brought forward their purchases to July, ahead of the Chinese seventh, or Hungry Ghost, month, which began in mid-August.
Analysts also said the pickup in the HDB resale market in July, with flat transactions totalling more than $30 million, also supported the increase in resale condo transactions from upgraders.
HDB flat owners could have been incentivised to upgrade to private property, given the growing HDB resale market and moderation of private home prices.
Additionally, analysts also noted that the proportion of foreign buyers continued to drop in July. This group accounted for 1.4 per cent of total resale units – the lowest proportion of condo resale units bought by foreigners since December 1995.
Foreigners bought 2 per cent of condo units resold in June and 3.7 per cent in May, according to URA Realis caveat data.
A Singaporean paid $18 million for a unit in Beverly Hill, in the Tanglin area – the highest transacted price for a condo resale unit in July.
Year on year, the number of units resold dropped by 17.7 per cent from July 2022. The number of transactions was also 17.6 per cent lower than the five-year average for the month of July.
This could be due to fewer home owners putting up their units for resale.
Some may be leasing out their properties as rental prices remain attractive, while others are still holding on to their properties due to the high replacement cost of a new home, she added.
Analysts predict that condo resale volume will continue rising due to the sizeable price gap between new launches and non-landed resale homes in July.
New condominium launches recorded median unit prices of $2,906 per sq ft (psf) in the prime district, $2,499 psf in the city fringes and $2,085 psf in the suburbs.
In comparison, non-landed resale private homes had lower median unit prices of $2,067 psf in the prime district, $1,705 psf in the city fringes and $1,391 psf in the suburbs.
Thus, buyers with limited budgets, those who require larger homes or those with more pressing housing needs will still continue to buy condo resale units.
Source: https://www.straitstimes.com/singapore/condo-resale-prices-dip-for-second-consecutive-month-4-more-units-sold-in-july #:~:text=SINGAPORE%20%E2%80%93%20Condominium%20resale%20prices%20dipped,amid%20a%20cloudy%20economic%20outlook.
