March 2023 condo resale prices continue to rise in March. Volumes also increased.
The Singapore resale condominium market continues to grow in March 2023, supported by strong demand for units in the Outside of Central Region (OCR).
According to the flash estimates, overall resale prices have increased by 1.4% month-on-month and by 8.6% year-on-year. The volume of resale condo transactions during the month rose by 53.9% to 1,133 units, up from 736 resale units in February.
Year-on-year, volumes edged up by 0.2% and were 13.9% higher than the five-year average volumes for the month of March.
This can be attributed to buyers returning to the market after the year-end holidays and the Chinese New Year period. At the same time, a rise in purchases by foreigners has also been seen.
Reasons for Growth in Resale Condo Market
Demand from HDB (Housing and Development Board) upgraders and foreign ultra-high-net-worth individuals who are relocating to Singapore may underpin demand in the resale condo market, according to market analysts.
Of the three regions, almost half of all resale condo deals occurred in OCR, followed by 28.8% in the RCR, and 21.4% in the CCR. The OCR registered the highest resale price gain of 2.1%, followed by the RCR, which rose 1.6%. This was in contrast to resale prices in the CCR, which dipped by 0.7%.
Rise in Proportion of Resale Transactions in Other Regions
While the OCR netted the most deals, there were proportionately more resale transactions in the other regions during the month, with CCR deals seeing the largest jump in volume.
This is unsurprising as price gains in the CCR have lagged the other two regions in the past 1-2 years. This provides the opportunity for buyers with the cash and liquidity to pick up prime homes for their own stay or as longer-term investments.
Price Gap between Resale and New Condos
Meanwhile, some buyers have turned to the secondary market as the price gap between resale and new condos has widened further. Median prices of non-landed new sales (excluding executive condos) were 67.1% higher than their resale equivalents, outstripping the 46% difference measured in the year-ago period.
It has also been observed that prices of new condos rose faster by 30.5% year-on-year in the first quarter of 2023, compared to resale condos which increased by less than half at 14.1% over the same period.
Impact of High Interest Rates
Property analysts are mixed on the impact of high interest rates on the resale market.
Given the “elevated” level of interest rates, this will impact both buyers of resale condos and new launches, although the latter will benefit from progressive payment schemes. Progressive payment schemes allow buyers of new uncompleted homes to make mortgage payments that increase gradually over time when certain construction milestones for the project are met.
However, with the US Federal Reserve likely to scale back on its pace of interest rate hikes, demand for properties will likely remain relatively firm, especially given the limited inventory of unsold units of new launches in the market.
Upcoming New Property Launches
For those looking for properties, the following are some of the new launches coming up soon:
- Newport Residences, a freehold mixed-used development at Anson Road.
- Skywaters Residences, a mixed-use development opposite Tanjong Pagar MRT station.
- TMW Maxwell, a mixed-use development opposite the popular Maxwell Food Centre.
- The Hill @ One-North, a mixed-use development near Buona Vista MRT station.
- Grand Dunman, a mega condo development next to the Dakota MRT station.
- Pinetree Hill, a condominium at Ulu Pandan.
- The Reserve Residences, a mixed-use development at Beauty World.
- Lentor Hills Residences, a condo development a short walk from Lentor MRT station.
- J’den, a mixed-use development at Jurong Lake District.