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Condo resale prices are expected to reach a 10-year high in 2021
No peak in sight: Condo resale prices maintain their surge through 2021
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ondo resale prices rose for the eight consecutive month, and are predicted to reach a decade high in volumes, according to a report by SRX. Prices in the Core Central Region (CCR) increased 1.1%, whilst Rest of Central Region (RCR) and Outside Central Region (OCR) prices decreased by 0.1% and 0.2% respectively in March 2021. Overall prices increased by 4.2% YoY against March 2020, and 0.1% MoM against February 2021. The report said that an estimated 1,662 units were resold in March 2021, a 28.9% increase from the 1,289 units resold in February 2021. This was the highest monthly volume seen since May 2011. Breaking down by different regions, in March 2021, 60.2% of the volumes were from OCR, 23.2% from RCR, and 16.5% from CCR. Meanwhile, the highest transacted price for a resale unit in the month was achieved for a unit in the EDEN condominium - it fetched $18.3m. OrangeTee’s senior vice president of research and analytics, Christine Sun, said that demand for resale homes in OCR had been higher due to a lack of 8
SINGAPORE BUSINESS REVIEW | JUNE 2021
new home supply in the suburban areas and rising new home prices. Over the 15 months from January 2020 to March 2021, there were few mega new launches above 500 units in OCR, and only two mega launches: the 640-unit Clavon development, and the 660-unit Ki Residences at Brookvale. Similarly, over the first three months of this year, there have been no mega launches in OCR. Sun says that has likely
propelled some buyers to seek alternative housing and investment opportunities, and many have found relatively good value in the resale market. “Developers have also been paring down the unsold stock for their launched projects. For some of the balanced units, prices seem to have risen recently. thus creating a bigger barrier to entry for many first-time homebuyers or HDB upgraders to buy new private homes,” Sun added. Sun also said that the rising prices of resale homes could be pushed even further by a number of different supply and demand factors. “A recovering economy and still-low mortgage rates may propel demand and prices of resale homes further. As mega launches in the suburban region will continue to be limited, demand for resale mass-market homes may continue to remain robust this year, barring new cooling measures or unforeseen circumstances,” Sun said. The head of research and content at PropNex, Wong Siew Ying, agreed with this sentiment, saying they expect demand for resale condos to remain healthy throughout 2021. This is expected to be largely driven by local end-user demand, including from those upgrading their private homes from HDB dwellings. “The wide price-per-square-foot gap between new launches and resale properties may also help to steer some buying interest towards the resale segment. Generally, we do expect some potential upside for resale home values, partly supported by the firm prices in the new launch market,” Wong added.
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