Resale market in SG returns after 2-year hiatus: Report
Units sold in the first seven months totalled 9,160, exceeding 2019 and 2020.
The private resale market is making a comeback as Singapore saw high demand for private resale condominiums in the first seven months of the year, OrangeTee said in a report.
Citing data from the Urban Redevelopment Authority (URA), OrangeTee reported that 9,160 private non-landed homes, excluding executive condominiums, have been sold so far.
This is higher than the 8,768 units and 7,547 units sold in 2020 and 2019, respectively. Moreover, this also exceeded the full-year sales from 2013 to 2016.
In 2018, the resale volume dropped by over 45% quarter-on-quarter due to the cooling measures implemented at the time. The volume remained low since an average of 1,700 units were sold per quarter until the second quarter of 2020.
The report linked the strong comeback to the vaccine optimism as well as the projected global economic recovery.
Demand surged in the suburban region as sales increased to 2,116 units in the second quarter of the year, up from only 343 units in the same period in 2020.
OrangeTee estimated that between 17,000 to 18,000 units will be sold this year, beating the total resale volume in the past two years even as the supply of new homes will remain limited.
“Supply will likely remain low as most developers have yet to replenish their land banks. The land supply in the suburban and city-fringe has dipped to a new low since the end of the collective sales cycle in 2018,” the report read in part.
“There have been few successful en-bloc deals and supply from the government land sales have been moderated.”
The resurgence in resale demand also led to the recovery of home prices. In the second quarter, condominium prices rose 3.4% year on year to $1,305 per square feet.
Over the same period, new condominium prices grew 17.1%, compared to the 3.4% increase for resale condominiums.
“As a result, the price gap of new and resale condominiums widened further from 30.2% in Q2 2020 per cent to 47.4 per cent in Q2 2021,” the report stated.
“Therefore, some resale condominiums could be undervalued, and there could be potential for further price growth.”