RESALE prices of non-landed private homes were stable in June, with sales volume recovering from the previous month, according to flash figures from real estate portal SRX Property on Tuesday.

Last month, 497 units were resold, representing a 174.6 per cent increase, or more than double the 181 units resold in May this year. However, last month’s resale volume is 26.3 per cent lower than in June 2019, and a 40.7 per cent drop from the five-year average volume for the month of June.

Wong Siew Ying, head of research and content at PropNex, said the pick-up in sales – albeit from a low base – follows two months of “relatively dismal resale activity” due to the circuit breaker and Phase One period during which prospective home buyers and agents could not visit and view properties.

As restrictions eased and Singapore entered Phase Two of reopening from June 19, sales activities resumed, contributing to the jump in transactions in June, Ms Wong said, adding that deals done last month could reflect the “pent-up demand” during the semi-lockdown period.

“To be sure, resale condo deals last month are still low compared to pre-Covid-19 times. While the increase in sales in June offers some hope of a more sustained growth, the numbers over the next few months should help to provide a clearer picture of the resale market,” she said.

Christine Sun, head of research and consultancy at OrangeTee & Tie, noted that the rebound in sales is “within expectation”, given that house viewings resumed after the circuit-breaker period.

Last week, the SRX flash estimate for the HDB resale market reflected a similar surge in sales, where close to seven times more flats were sold in June compared with May.

Ms Sun added that the private resale market picked up quickly last month due to the use of technological tools such as virtual house tours and e-open houses, which helped to speed up the buying process, as some buyers could shortlist units remotely prior to the resumption of house viewings.

Overall, condo resale prices last month remained unchanged over May. They were 0.6 per cent lower than in June 2019, which is marginal, according to PropNex’s Ms Wong.

“By and large, June’s stable price trend showed that sellers still have relatively firm holding power and are also more realistic with their asking prices, perhaps mindful of the challenging market conditions,” she said.

Month on month, prices in the core central region declined 1.8 per cent, and prices in the rest of central region or city fringes fell 1.1 per cent, while prices outside the central region rose 1.4 per cent in June this year.

According to Ms Sun, with lower sales inked in previous months, the price gap expectation seemed to have narrowed as more buyers and sellers were willing to negotiate prices. “This may also explain why more deals were closed in recent weeks, as both parties were willing to lower their price expectations.”

Separately, SRX data showed that the highest transacted price for a resale unit last month came from an apartment at Skyline @ Orchard Boulevard, which went for S$12.2 million.

In June, SRX’s overall transaction over X-value (TOX) came in at negative S$10,000, unchanged from May 2020. 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.

District 23 (Dairy Farm, Bukit Panjang, Choa Chu Kang) posted the highest median TOX at positive S$5,000, while District 9 (Orchard, River Valley) recorded the lowest median TOX at negative S$80,000.

Nicholas Mak, head of research and consultancy at ERA Realty, said flash estimates from the Ministry of Trade and Industry on Tuesday – showing that Singapore’s gross domestic product contracted 12.6 per cent in Q2 from a year ago – could slow down the rate of increase in condo resale volume.

Nonetheless, the large number of HDB resale flats that would be eligible for sale on the market could spur upgraders’ demand, he said.

“These 26,000 new HDB flats would reach the end of their five-year minimum occupation period in 2020. To avoid paying additional buyer’s stamp duty, these HDB flat owners would need to buy a completed resale condo for their own use after selling their HDB flats. Therefore, the transactions of resale condominiums could still continue to rise in the coming months,” he added.

He estimates that 8,000 to 10,000 private condo units could be transacted in the resale market for the whole of 2020.

Meanwhile, PropNex’s Ms Wong has a more conservative outlook. “Based on SRX data, 992 condo units were estimated to have been resold in Q2 2020 – a sharp drop of 58 per cent from the 2,371 units resold in Q2 2019. Given the weaker resale numbers in the last quarter, we anticipate the total resale condo transactions could come in at 6,500 to 7,000 units for the whole of 2020 – down from 8,949 resale transactions in 2019.”


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