Demand for resale condos holds steady in May

Resale transactions to stay muted in June in view of the school holidays.

Resale prices of private condos continued to inch up for the fourth consecutive month in May due to sustained demand, according to property analysts.

Christine Sun, chief researcher and strategist at OrangeTee Group, said the volume of condos resold last month was up 7% YoY and still exceeded the five-year average for May, indicating that there is “sustained demand for resale condos,” despite the 5.5% MoM drop.

Prices have also held up, with condo resale prices inching up 0.4% MoM and 4.2% YoY.

Sun said HDB upgraders and locals buying homes for their own use are the main drivers of the secondary market, with more than half of resale transactions being affordable homes in the suburbs.

“Moreover, there is still a significant price difference between new and resale condos, which may have led buyers to choose more cost-effective options available in the resale market,” she added.

Mark Yip, CEO of Huttons Asia, said the absence of major condo project launches last month might have driven some homebuyers to turn to the secondary market/

For June, Yip expects buying activity to drop by 30% and settle between 600-700 units from 1,084 units last month in view of the school holidays.

Wong Siew Ying, PropNex’s head for research and content, shared the same view, noting that transactions will likely retreat this month after rebounding in the recent months.