January 2020 Resales Prices for Condominium Inches Up & the Impact of Viru
Condominium Resale Prices Increase in January 2020
January 2020 Resale prices up 2.3% year-on-year; volume rises 15.9% from previous January as buyers and sellers return to the market after the year-end holidays.
RESALE prices for non-landed private residential properties in Singapore rose slightly in January 2020 after a flat performance in December, according to flash estimates from real estate portal SRX Property.
Condominium resale prices were up 0.5 per cent compared to December. Year on year (y-o-y), prices increased 2.3 per cent.
Meanwhile, volume grew 4 per cent to 684 units resold in January, from the 658 units resold in the previous month. Sales volume climbed 15.9 per cent y-o-y, and was also 13.4 per cent higher than the five-year average for the month of January.
Nicholas Mak, head of research and consultancy at ERA Realty, said resale property transaction volume and price for January 2020 have largely not been affected by the novel coronavirus situation.
“The fallout from this epidemic will be felt from February onwards, where the transaction volume will be more adversely affected than prices,” Mr Mak said, estimating a drop in the first quarter of the year to be as much as 25-30 per cent compared with the previous quarter.
He added that potential homebuyers may avoid viewing resale properties for fear of coming into contact with the virus. Likewise, property sellers may be reluctant to open their homes for viewings.
By region, SRX said resale prices in the core central region (CCR) fell 0.8 per cent last month from December. Meanwhile, prices in the rest of central region (RCR) rose 1.5 per cent and increased by 0.5 per cent for condos outside central region (OCR).
All three regions saw higher prices y-o-y in January this year. Prices rose 1.7 per cent in the CCR, 2.6 per cent in the RCR, and 2.3 per cent in the OCR.
In terms of sales volume last month, about half (51.9 per cent) came from the OCR, while 24.7 per cent of units resold were in the RCR and 23.5 per cent were in the CCR.
The highest transacted price for a resale unit in January was S$18.2 million at luxury condo Le Nouvel Ardmore in District 10.
The most expensive unit in the RCR was in Camelot By The Water in Tanjong Rhu, resold for S$6.6 million, while the OCR saw its priciest unit resold for S$3.2 million at Waterfront Key in Bedok.
The overall transaction over X-value (TOX) in January 2020 worsened to negative S$2,500, down S$500 from December 2019.
TOX measures how much a buyer is overpaying (positive value) or underpaying (negative value) for a property based on SRX’s computer-generated market value. The data includes only districts with more than 10 resale transactions.
The highest median TOX was recorded in District 13 (MacPherson and Potong Pasir) at positive S$28,000, followed by District 25 (Admiralty and Woodlands) at positive S$24,000.
The lowest median TOX was recorded at District 15 (East Coast and Marine Parade) at negative S$30,000, followed by District 4 (Sentosa and Harbourfront) at negative S$29,700.
OrangeTee & Tie research head Christine Sun said the strong underlying demand for new homes continues to spill over to the secondary market, lifting both prices and sales volume for the resale market.
analysts are bracing themselves for a possible fallout from the coronavirus outbreak.
Comparing with 2003 during the SARS period, market should expect a drop in transaction volume overall for 2020.
Mr Mak said the private resale market could see the effects of the virus outbreak this month, with transaction volumes more affected than prices. “Potential home buyers may avoid viewing resale properties for fear of coming into contact with the coronavirus.
“Property sellers may be reluctant to open up their homes for strangers… as they are worried that there is a chance that one or more of the buyers could be a carrier. As a result, the resale volume in the first quarter of 2020 could fall by as much as 25 to 35 per cent quarter on quarter.”
But prices could be more resilient. This could also mean an increase in rental.
“Property owners who are not in a hurry to dispose of their real estate would resist lowering their asking prices, especially if they are confident that this virus outbreak, like all other previous outbreaks, would eventually pass,” said Mr Mak.
Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said it is too early to gauge the impact of the virus on the private resale market.
“Currently, there is no major impact on the property market as it is not one of the sectors that are directly affected by the coronavirus, unlike tourism, retail, food and beverage, and Mice,” she said, referring to meetings, incentives, conferences and exhibitions.
SRX data shows the highest transacted price for a resale unit last month was $18.2 million for an apartment at Le Nouvel Ardmore at Ardmore Park in prime District 10. In the city fringes, a unit at Camelot By The Water in Tanjong Rhu went for $6.6 million, while in the suburbs, a unit at Waterfront Key in Bedok Reservoir was resold for $3.2 million.