In February 2023, the resale volumes of private condominiums in Singapore increased for the first time since October 2022. The rise was driven by pent-up demand following the Chinese New Year period.
The number of resold units in February was 756, a 50.3% increase from the previous month, but sales volumes were still 4.2% lower than in February 2022 and 4.1% lower than the five-year average for the same month. Nearly half of the transactions took place in the Outside Central Region (OCR), while 28% occurred in the Rest of Central Region (RCR) and 23.2% in the Core Central Region (CCR).
Increase In Buyer Stamp Duty Spurred Demand
One reason for the increase in volume was the rush by buyers to complete their home purchases before the Buyer Stamp Duty for higher-value residential and non-residential properties increased in mid-February. This was announced by Deputy Prime Minister and Minister of Finance Lawrence Wong during his budget speech on 13 February this year.
In the OCR, the demand for properties below S$1.5 million may have resulted in the increase in demand for resale properties.
Condo resale prices rose 1.4% month-on-month in February, with a 1.4% increase in RCR and a 0.3% dip in CCR. On a year-on-year basis, condo resale prices increased by 9.2%, with increases of 11.5% in the OCR, 7.3% in the RCR and 6.6% in the CCR.
The overall median capital gain for resale condos in February was S$300,000, an increase of S$26,000 from the previous month.
The median unlevered return for resale condos was 27.3%, with the highest transacted price being a S$20.5 million resale unit at Nassim Park Residences.
Analysts caution that the sales rebound in February does not mean that the property market will continue its upward trend. The resale market continues to face headwinds from global economic uncertainties stemming from the banking crisis, while mortgage rates and borrowing costs are likely to remain elevated despite the possibility of the US Federal Reserve scaling back the pace of its interest rate hikes if the banking crisis worsens.
At the same time, the ongoing Russia-Ukraine war has continued to cast a pall on the global economy.
Demand for Resale Condos to Stay Firm
Despite this, demand for resale condos is likely to remain firm due to the price gap between new and resale condos. This is expected to push some buyers towards the secondary market.
In addition, a growing number of condos will be obtaining Temporary Occupation Permits, which could result in more units being put up for resale in the coming months.
Meanwhile, the return of foreign buyers, many of whom usually target properties in prime or central locations, will further boost transactions in the resale market.
Nevertheless, those looking for new property launches can look forward to a slew of offerings in the next few months. These include the following:
- Newport Residences, a freehold mixed development on the former site of Fuji Xerox Towers.
- Skywaters Residences, a 99-year leasehold mixed development on the former site of AXA Tower.
- TMW Maxwell, a 99-year leasehold mixed development on the former site of Maxwell House.
- Tembusu Grand, a 99-year leasehold condo at Jalan Tembusu.
- The Continuum, a freehold condo at Thiam Siew Avenue.
- Grand Dunman, a 99-year mega condo next to Dakota MRT station.
- Blossoms by the Park, a 99-year mixed development at One-North.
- The Hill @ One-North, a 99-year mixed development at One-North.
- Lentor Hills Residences, a 99-year condo at Lentor Hills Road in District 26.
- The Arden, a condo near Phoenix LRT and Bukit Panjang integrated transport hub.
- The Reserve Residences, a mixed development linked to the Beauty integrated transport hub.
- LakeGarden Residences, a condo beside the Jurong Lake Gardens.