Buyer hesitancy drag condo resale volumes down 

In January, resale volume slipped 0.6% MoM. 

Buyers in Singapore have become increasingly hesitant to pay higher prices for condominiums in the resale market.

In a statement, OrangeTee attributed the softening buying sentiment to concerns over inflation and uncertainties in the global economic landscape, leading potential buyers to exercise caution with their spending. 

"Some potential buyers could be more careful with their spending amid inflationary concerns and an uncertain global economic outlook. Others could be waiting on the sidelines as they hope interest rates will moderate further, which will improve housing affordability," the group said.

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OrangeTee reported a third consecutive month of decline in condominium resale volume for January.

Additionally, the expert said the upcoming launch of new projects post-Chinese New Year celebrations is also prompting certain buyers to weigh their options.

Meanwhile, Huttons Asia has observed a rising resistance amongst buyers to inflated prices for resale condominiums, driven partly by persistently high interest rates.

"After clocking close to a 10% increase in prices in 2022, prices in the resale condo market climbed another 7.3% in 2023. Resale condo prices have outpaced those in the new sale market," said Mark Yip, CEO of Huttons Asia.

"Interest rates have continued to remain high thus limiting buyers' willingness to pay high prices for a resale condo. Hence prices of resale condos moderated by -0.8% in January 2024," he noted.

Huttons attributed the trend was attributed to high interest rates which have deterred buyers from investing in resale condos at elevated prices. 
The luxury segment, however, witnessed notable activity, with two units in The Ritz-Carlton Residences sold to Chinese permanent residents for $16.5m each, marking a new high per square foot price for the project. 

"Interest in the luxury segment has picked up in recent months. Two foreign buyers from China have picked up homes in Jan and there are arrangements during the Chinese New Year to view properties. There may be more purchases in the coming months," said Yip.

"Prices of resale condo may rise by 4% to 6% in 2024, moderating from the 7.3% increase in 2023," he added.

OrangeTee said it is too early to determine whether the dip in housing prices in the last month signifies a temporary anomaly or the onset of a market correction.

"We have to observe the market for one to two more quarters for a more accurate assessment," it said.

Still, the expert expressed optimism, noting that with fewer condominiums expected to be completed this year, there is potential for a price increase due to decreased supply.