SINGAPORE – Condominium resale rates increased for a fourth consecutive month in May 2023 on the support of stronger sales, as purchasers continue to consider resale properties, given the noticeable price gap between new private residences and those on the secondary market.

An estimated 946 condominium resale units transacted in May, marking an 8.9% rise from the 869 units resold in April 2023, stated the flash data released by real-estate portals 99.co and SRX on 27 June 2023, Tuesday.

However, the rise of condo resale prices slowed down to 0.9% in May, compared to the 1.3% the month prior, data displayed.

Ms Wong Siew Ying, PropNex head of research and content, pointed to the Urban Redevelopment Authority (URA) Realis data indicating that the median unit price gap between resale properties and new condo units stood at 62.3% in May 2023, widening from April’s 60.9%. “With the sizeable price gap between new projects and resale condos, the resale market would become a preferred hunting ground for those with smaller housing budgets or bargain-seekers,” she mentioned.

Mr Eugene Lim, ERA Realty Network key executive officer, said some purchasers might be hedging against the high interest rates by choosing new launches like Lentoria, as their mortgage installments are staggered over time, not like purchasers of resale homes who will face the full impact of high interest rates at the point of purchase.

The lion’s share of condominium resale transactions in May 2023 was registered in the suburbs, or outside the central region, at 50.7%, data displayed.

Units in the city fringe formed 31.8% of total transactions while those in central Singapore accounted for 17.5%.

Some analysts also discovered an rising number of buyers purchasing new condominium units that are yet to be completed, under transactions commonly known as “sub-sale transactions”.

Mr Lee Sze Teck, Huttons senior director of research, said some purchasers may opt for these yet-to-be-completed homes to save on renovation costs that may be substantial in older resale apartments.

Mr Luqman Hakim, chief data and analytics officer at 99.co, commented that sub-sale transactions formed 8.6% of the total resale transactions in May 2023. The proportion is the second highest since sub-sale monthly transactions striked a historic low of 0.7% in October 2020.

He noted that new launch owners generally sell their incomplete condominium units for capital gains, liquidity, or when the waiting term is too long. Another possibility could be that they are not able to make more loan repayments because of the rise in mortgage interest rates, he added.

Mr Nicholas Mak, Mogul.sg chief research officer, mentioned he expected the secondary condominium market to be constantly supported by today’s high rental market, with the resale condominium price index rising by 7 to 10% for the whole of 2023.

Source: https://www.straitstimes.com/business/property/condo-resale-prices-up-09-in-may-more-units-sold-as-buyers-turn-to-secondary-market