April's condo resale volumes smash 11-year record

Demand is expected to remain healthy thanks to HDB upgraders and delays in new housing projects.

Condo resale volumes rose to their highest-ever level in April on the back of strong demand from HDB upgraders and potential delays in the completion of new residential projects amidst ongoing travel restrictions.

An estimated 1,993 condominium units were resold in April, according to data from the SRX, smashing the record last set in April 2010. This is also more than six times higher (528.7%) than volumes recorded a year ago, and more than double (125.2%) than the 5-year average volumes for the month of April.

Demand is spurred by current HDB flat owners looking to upgrade their homes, with over half of the resale volume occurring in the Outside of Central Region (OCR), notes Christine Sun, head of research & consultancy, OrangeTee&Tie.

“Many HDB flat owners have sold their flats in recent months and are searching for affordable, completed homes. Therefore, demand for resale homes may continue to increase in the coming months since prices of new homes are rising in many locations and the supply of mass-market condominiums remain limited,” Sun said.

Some HDB upgraders could have also bought homes in the city fringe where 23.7% of total resale units were in the Rest of Central Region (RCR) last month, she added.

Breaking down by regions, in April 2021, an estimated 56.9% of the volumes are from OCR, 23.7% from RCR and 19.5% from CCR.

Alongside the increase in sales, resale prices also rose, with overall prices increasing ng by 5.8% YoY compared to the same month in 2020. With over half of resale activity in the region, OCR prices jumped by 7.3% YoY compared to a year earlier. Meanwhile, prices in the RCR and Core Central Region (CCR) rose by 5.5% YoY and 2.6% YoY, respectively.

Compared to March, OCR prices rose by 1.7%, whilst RCR and CCR prices both rose by 1.2%. Overall, prices are 1.5% higher in April than in March.

In the near-term, demand for resale units will likely be supported by buyers searching for move-in ready properties instead of yet-to-be-completed new residential projects, said to Siew Ying Wong, head, research and content, Propnex Realty.

Potential delays in the completion of new residential projects amidst the pandemic-induced travel restrictions continue to impact manpower availability in the construction sector, Wong noted.

“For buyers purchasing a home for own use, a delay in the completion of the new project by several months could mean having to find short-term accommodation – incurring rental expenses – as well as going through the hassle of moving. For investors, a push back in the completion of new condos could well mean a loss of rental income,” he said.
In view of these considerations, the demand for resale properties will likely remain healthy, supported by buyers who prefer move-in ready properties in order to avoid the uncertainty around completion delays, according to Wong.

The substantial price gap between new sale and resale properties may also encourage some buyers who have a tighter budget to look at the resale market.

April’s highest transacted resale unit was a unit at Leedon Residence sold for $13.8m. In RCR, the highest transacted price is a unit at The Meyerise resold for $5.2m, whilst a $3.2m unit at Ocean Park took the cake for OCR.

Photo from SCDA Architects