Brace for pricier condo resales from expensive launches

Prices have been jumping 1% every month since the start of the year.

The resale prices of Singapore condos has been climbing 1% every month since the start of the year as prices in SRX Property’s index jumped 1.2% in May, OrangeTee & Tie head of research & consultancy Christine Sun said.

Based on SRX's SPI, the resale price of private condos has already risen by 6% from January (index value 177.2) to May (187.7) this year.

“The property market is still on a strong upswing with plenty of momentum. We foresee that resale prices could experience more upside in the coming months, largely driven by the higher new launched prices from pricier land acquisitions,” Sun said.

Moreover, the resale price growth is within their earlier projection which range between 8% and 12% for the whole of 2018.

On a year-on-year basis, the price of all private condos increased 11% in May 18. By market segments, there double digit gains across all regions -- CCR (11%), RCR (11%) and OCR (10%).

The broad-based price recovery indicates that buying interest has returned to all market segments, Sun said. “We expect resale prices to continue to rise in the coming months especially in areas near the completed collective sales sites as some displaced en bloc owners may prefer to stay near their former homes as they are more familiar with the living environment.”

Moreover, Sun noted that the prices of some homes in RCR and OCR may increase further as some en bloc owners are currently looking for smaller private homes in the mass market or fringe areas for investment.