Condominium sales rebounded 17.4 percent during March, reaching their highest level for seven months. Buyers returned to the market following a seasonal dip in February.
Flash data from SRX & 99.co released yesterday (25 April) revealed that 883 resold units were made in March compared to 752 units sold in February.
The volume of resale was still 22,8 percent less than last year and 12 points below the average for the past five years.
According to analysts, one possible reason for the volume recovery is the resumption during the current month of launches. This will have a positive spillover effect on resale.
Existing condo owners could have sold their current unit and bought a brand new one. This way, they would not be required to pay ABSD on the second property. Some buyers could have chosen a condo resale after comparing prices.
Analysts noticed an increase of foreign purchases in January as the viewings around the Chinese Year of the Pig increased.
Some of those viewings may translate into purchases in April.
The data from URA Realis research shows that the percentage of condos being sold to foreigners (non-permanent residents) is now 1.3 percent of total resale, compared to just 0.5 percent in February.
Analysts think that despite the modest increase in activity noted in March, mismatches in expectations regarding pricing could weigh on transactions.
While many sellers are open for negotiations, it is clear that they are unwilling to lower the price of their home significantly due to the high cost.
In the same month, the proportions of resale non landed private home transactions that went to foreign buyers increased from 0.5 in February to 1.3 percent. In absolute terms there were 11 sales to foreigners in the month. Six of these were to US-based buyers, three to Chinese and one to each Norway and Switzerland.
The price of resale goods meanwhile has remained stagnant, rising only 0.4 percent on the year but 5 percent over the past month.
Rental income is falling, and high interest rates make it difficult for investors to use this income to pay the monthly mortgage installments.
Outside Central Region (OCR), with its 1.6 per cent increase in resale value, recorded the biggest price gains.
It’s not surprising to see the price rise accelerate, since there were many suburban launches in recent times and the median price was above S$2,000 for new homes.
Resale prices across the Rest of Central Region RCR increased by 1.2 per cent. Resale values in the Core Central Region, however, fell by 2.8% compared to the previous month.
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The resale market in all regions was up on the previous year. This area was dominated by the OCR. Prices were 7.1% higher.
The RCR had the highest percentage of sales (31,6%), followed by the OCR with 48.2%. CCR sales accounted 20.2% for the total resale.
Sub-sale transaction accounted only for 8.1 percent of all second sales, a decrease of 4.3 percentage point from February.
SRX &99.co both said that it was the lowest rate in 12 months.
Sub-sale is the term used to describe secondary sales before a construction project has been completed. Secondary sale transactions are made up of both resale, and subsale.
The highest recorded price was S$8.7million in March, for a condominium unit at Corals Keppel in the RCR.
In the CCR, a condo unit at Astrid Meadows changed hands for S$7.1m. In the OCR market, the highest condo deal was a S$3.4M unit at Seaside Residences.
Ki Residences
The median capital gains on resale properties in March were S$380,000. This is up S$20,000 since the month before.
The district 11 showed the highest median return on capital, at S$823,000. While District 1 reported a median capital decline of S$63,000.
The District 26 reported the highest unlevered median return (63.3%), while the District 1 registered a negative unlevered median return (5.8%).
Capital gains or returns on a condo unit resale can be calculated by comparing its current price with its previous sale price. Districts which have less than 10 transactions that match are excluded from ranking.