Holiday activities, rising interest rates to blame for low condo resale volume

Condo resale volumes declined 14.5% month-on-month in August 2022.

The condo resale volume decreased 14.5% month-on-month in August 2022 due to the seventh lunar month and increase in interest rates, property experts said.

Reacting to the SRX Price Index for Condo Resale, One Global Group and OrangeTee experts said there is “stigma” in buying properties during hungry ghost activities.

“The buyer-seller price gap has also widened, resulting in fewer deals being closed last month,” said OrangeTee.

One Global Group’s senior analyst Mohan Sandrasegeran said overall prices continued to increase by 1.2% in August due to demand for “for strategically located properties and newly completed developments.”

Huttons Asia CEO Mark Yip also attributed the low resale volume to the higher interest rate.

PropNex Realty head of research Wong Siew Ying said home leasing demand and rentals are still going strong, which made an impact on condo resale volume in August.

“Whilst feedback from some PropNex agents suggest that they have yet to see a significant or widespread impact of rising interest rates on resale demand, we remain watchful of rising home loan financing costs as a downside risk to home sales going forward,” said Wong.