In May 2024, the Singapore condo resale market exhibited mixed signals, with prices inching up slightly while transaction volumes dipped. This development has sparked interest and some concerns among market watchers and potential buyers alike.
According to flash data from SRX and 99.co, resale prices for condominiums rose by a modest 0.4% month-on-month and 4.2% year-on-year. Despite the slight price increase, the market saw a 5.5% decline in the number of units sold compared to April, with 1,084 units changing hands in May. However, this figure still represents a 7.2% increase year-on-year and is 19.2% above the five-year average for May.
Mohan Sandrasegeran, head of research and data analytics at SRI, highlighted the resilience of the market, noting that the number of transactions remained robust around the 1,000-unit mark despite seasonal fluctuations. This indicates underlying stability and persistent demand in the resale market.
One of the notable trends was the significant drop in transactions within the Core Central Region (CCR), which fell by 34.6% to 168 units. Eugene Lim, key executive officer at ERA Singapore, attributed this to the higher Additional Buyer’s Stamp Duty introduced for foreign buyers in April 2023, which has dampened demand and stagnated prices in the CCR.
In contrast, the Rest of Central Region (RCR) and Outside Central Region (OCR) also experienced declines in transactions by 14% and 4.1%, respectively. Despite this, the OCR continued to dominate the market, accounting for 51.7% of total volumes, followed by the RCR at 31.3% and the CCR at 17.1%.
Christine Sun, chief researcher and strategist at OrangeTee Group, noted the sustained demand for resale condominiums in the OCR, likely driven by HDB upgraders and local buyers looking for homes to occupy. This trend underscores the attractiveness of resale properties in non-central regions, particularly for those seeking more affordable options compared to new launches.
The data also revealed interesting capital gains insights. District 21 (Clementi Park, Upper Bukit Timah) posted the highest median capital gain at S$657,000, while District 1 (Boat Quay, Raffles Place, Marina) had the lowest at S$19,000. Furthermore, District 22 (Boon Lay, Jurong, Tuas) recorded the highest median unlevered return at 42.3%, contrasting sharply with District 1's 1.5%.
Looking ahead, market analysts anticipate a slowdown in transaction volumes in June due to the school holidays, which typically see fewer viewings as buyers and sellers go on vacation. Additionally, the absence of new project launches is expected to keep resale volumes relatively stable.
Mark Yip, CEO of Huttons Asia, projects that transaction volumes may drop by 30% to between 600 and 700 units in June. Despite this potential dip, he forecasts that resale prices could increase between 4% and 6% in 2024, reflecting continued confidence in the market.
Summary Highlights:
- Price Increase: Resale condo prices rose 0.4% month-on-month, 4.2% year-on-year.
- Volume Dip: Transactions fell 5.5% from April, with 1,084 units sold in May.
- Regional Differences: CCR transactions down 34.6%; OCR dominated with 51.7% of total volumes.
- HDB Upgraders: Sustained demand in OCR driven by HDB upgraders and local buyers.
- Capital Gains: Highest median gain in District 21, lowest in District 1.
- Future Projections: June volumes may dip due to school holidays; prices expected to rise 4-6% in 2024.
The mixed performance of the condo resale market in May suggests a nuanced landscape where price resilience coexists with regional disparities and volume volatility. While the OCR continues to attract significant interest from local buyers and HDB upgraders, the CCR struggles under the weight of increased buyer’s stamp duties for foreign investors. This divergence underscores the importance of understanding regional dynamics when navigating the resale market.
Stay informed about the latest market trends and insights. Reach out to us today to get personalized updates and expert advice on making the best property decisions in this evolving landscape.