Seasonal lull drags condo resale market 

Resale volume dropped 14%MoM in December.

The condo resale market in December declined by 14% with only 661 units resold during the month, which analysts linked to the seasonal lull. 

The December resale performance declined by 49% year-on-year, according to the flash report of SRX and 99.co. It is also 25.1% lower than the average volume recorded in the past five years and for 2022, the total resale condo volumes are estimated to be 11,949, declining by 26.1% year-on-year. 

“The number of transactions fell as many people were on overseas holidays, and there were fewer house viewings. Further, many buyers were expecting prices to moderate after the cooling measures while sellers were holding firm to their asking prices,” Christine Sun, Senior Vice President of Research & Analytics, OrangeTee said.

“As a result, the price expectation gap between buyers and sellers widened, resulting in fewer deals being sealed or deals taking longer to negotiate.” 

OrangeTee projected the price gap to widen in the near term as sellers remain unwilling to make adjustments in their selling price. Overall prices grew by 9.7% in December, down from 10.8% in the previous year.

“This is because the cost of living is rising, and many are gainfully employed. Sellers may also find the replacement cost to be high since a new home is costly with prices of new and resale private homes still rising,” Sun said. 

“On the other hand, higher mortgage rates and inflation are affecting buyers' affordability.”

Meanwhile, PropNex Realty said that aside from the seasonal lull, the 15-month wait-out period introduced in end-September likely contributed to the decrease in resale volume.

“Under the measure, private homeowners are required to wait 15 months following the sale of their private property before they can purchase a resale HDB flat,” Wong Siew Ying, Head of Research and Content, PropNex Realty, said. 

“This has discouraged some would-be sellers who intend to buy a resale HDB flat as a replacement home from transacting, further crimping resale condo stock on the market. We expect the condo resale volume to be relatively lacklustre in January as well in view of the Chinese New Year festivities.”