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CONDO resale volumes surged in July – an increase in sales which analysts attributed to a lower base from the month before due to the school holiday season. 

Based on flash estimates from SRX and 99.co released on Monday (Aug 26) about 1,075 units were resold, representing a 32.2 per cent increase from the 813 units transacted in June.

Volumes were 21.7 per cent higher year on year, and 9 per cent higher than the five-year average volume for the month of July.

“We think the increase in sales in July was partly seasonal, as more buyers and sellers returned to the market after the month-long school holidays in June,” said Wong Siew Ying, head of research and content at PropNex. 

By region, more than half (51.9 per cent) of the transactions came from Outside Central Region (OCR), about one-third (31.1 per cent) came from the Rest of Central Region (RCR), and 17 per cent were from the Core Central Region (CCR).

Christine Sun, chief researcher and strategist at OrangeTee Group, said the increased demand for private homes may have also been caused by Housing and Development Board (HDB) upgraders. 

Noting that some HDB resale transactions had fetched at least a million dollars, Sun said the higher prices at which upgraders sold their flats may have given them the funds to purchase a condo resale unit.

Overall prices were up 0.8 per cent from June, and 5.5 per cent from July 2023. 

Month on month, prices in the CCR clocked the biggest increase at 2.8 per cent after four consecutive months of decline since March. Nicholas Mak, chief research officer at mogul.sg, said this is, however, considered a “technical rebound” which “does not signal a robust recovery”. 

Prices in the RCR and OCR each rose 0.4 per cent on the month. 

Year on year, prices were up 7.1 per cent for RCR, 6 per cent for OCR and 2 per cent for CCR.

Sub-sale transactions

Meanwhile, the percentage of sub-sale transactions to the total secondary sale transactions was 7.1 per cent in July, down 5 per cent from June.

Sub-sale transactions refer to secondary sale transactions that happened before the project was completed. 

Luqman Hakim, chief data and analytics officer at 99.co, said the drop is likely due to competition from new launches such as Kassia in the Changi area and Sora in the Jurong region.

“Some price-sensitive buyers who were previously deciding between a new and resale condo may have chosen a resale condo,” said Mark Yip, chief executive of Huttons Asia.

Mogul.sg’s Mak added: “The pace of construction in many of the residential developments has normalised and overcome the supply chain disruptions caused by the pandemic.”

In July, the highest transacted price for a resale unit was S$14.2 million for a unit at Nassim Park Residences.

The overall median capital gain was S$379,000 in July – an increase of S$58,000 from the previous month. 

District 15 (East Coast/Marine Parade) posted the highest median gain at S$631,000, while District 1 (Boat Quay/Raffles Place/Marina) posted the lowest at negative S$67,000.

The overall median unlevered return for resale condos was 31.4 per cent in July.

District 21 (Clementi Park/Upper Bukit Timah) recorded the highest median return at 49.7 per cent, while District 1 recorded the lowest at negative 4.8 per cent.

Capital gains and returns of a condo resale unit are calculated by comparing the current transacted price with the previous transacted price for the same unit.

Continued upward trend for condo resale units

Analysts said the upward trend in the condo resale market is likely to continue.

OrangeTee’s Sun said: “The robust demand and declining supply of newly completed homes may continue to sustain the prices of resale condos.”

Wong Shanting, head of research and market intelligence at ERA Singapore added: “More buyers are turning to the resale market ahead of the interest rate cuts in hopes of securing value buys, particularly for freehold homes which are hard to come by.”