Singapore: After 19 straight months, the price of resale condominium units rose for the 19th straight month in February. The number of transactions continued to drop because of global uncertainty and a rise in Covid-19 cases.
Real estate websites 99.co and SRX released flash figures on Tuesday that show that prices rose 0.6 percent last month, which was faster than January’s 0.4 percent, which was slower than last year (March 15).
There were an estimated 1,013 resale units last month, down 5% from the 1,119 units that changed hands the month before. This is the sixth straight month that resales have dropped.
It was 23.9 percent less sales in February than it was the same time last year.
Geopolitical uncertainty and Festive Moods caused dropped in new condo purchase
Analysts say that the weak sales could be because of slower market activity during the Chinese New Year period and geopolitical uncertainty caused by the conflict between Russia and Ukraine.
OrangeTee & Tie, Christine Sun, said that some buyers may have taken a break because of the Russia-Ukraine conflict, which has caused oil and natural gas prices to rise all over the world, which has caused commodity markets to be shaken.
Property research and content manager Wong Siew Ying said that the rise in Covid-19 cases last month and a limited number of units for sale could have slowed down sales.
Buyers affected by Cooling Measures
ABSD (additional buyer’s stamp duty) rates for foreign buyers and investors with a lot of properties may have also hurt sales in the core central area, which is popular with these buyers.
The property cooling measures that were put in place in December raised the ABSD rate for people who bought their second or third home from 12% to 17%, and from 15% to 25% for people who bought their third and fourth.
The total debt service ratio for people who borrow money has been reduced from 60% to 55%.
For foreigners who buy any kind of home, the ABSD is now 30%, up from 20%.
Around 63.9 per cent of sales last month came from condos in the suburbs, which is where most of them were sold, There were 22.3 percent of homes in the city fringes, and the rest were in the core central area.
There was a condo in the Orchard Road area that sold for $10.5 million in resale last month. It was a freehold unit at Ardmore Park.
There was a freehold apartment for sale at Amber Residences in the Marine Parade area that sold for $6.78 million.
If you live in an urban area, you can buy a freehold Goldenhill Park Condominium in Ang Mo Kio for $4.3 million.
There has been even more of a price gap between people who are selling and people who are buying, Mark Yip said.
“Buyers are expecting more price changes because of uncertainty, but sellers who are better off because of the strong economy are keeping their prices the same.”
Ms Wong said that even though there has been a drop in sales, she is still optimistic about the resale market.
Slower Price Growth expected till end of 2022
There will be very few new projects this year, and there may be more HDB upgraders who want to buy a private home. This will help keep the demand for resale condos strong this year. Launches this year expected to receive strong response due to lack of comparison. One good project to explore is 33 Devonshire, which is a freehold condo at Somerset.
She said that an estimated 31,325 Housing Board flats will be out of the five-year minimum occupancy period this year, which could lead to more families moving into their own homes.
Ms Sun said that prices might not go down much in the next few months. “Slower price growth may last until there is more clarity in the market and the geopolitical situation calms down,” she said.
Transactions of New Condos Dropped to Lowest since May 2020
Sales of new products fall to their lowest level. Since May 2020, new private home sales in Singapore have dropped by almost 23% month-on-month to 527 units in February. This was the lowest number of units sold in a month since May 2020, when 487 units were sold. The Urban Redevelopment Authority (URA) said that commercial complexes and mixed-use projects with a commercial component will no longer be able to be split into separate buildings in Central Areas.
It was a good month for developers to start building new private housing units from existing projects, but new home sales fell by almost 23% last month to 527 units from 680 units in January because there were no major new launches and the typical Chinese New Year lull.
Since May 2020, when 487 units were sold each month, February was the month with the fewest sales.
The number of units built by developers in February was 194 compared to 178 the month before and 162 the year before that. That’s an increase of 9% and 16.2%. In the last month, there was only one new project. It was the 32-unit Royal Hallmark on Haig Lane, which opened.
In February, there were 559 new home sales, down 23.6 percent from 732 new home sales in January. Including executive condominiums (ECs), there were 559 new home sales.
In addition to a lack of new launches and a lack of sales during the Chinese New Year period, the new property cooling measures and rising interest rates could also have played a role in the drop in sales. Potential buyers may be more cautious before making a purchase.