Are you looking for a condo in Singapore? If so, then you’ll be interested to know that resale prices have dipped for the first time in over two years. In this blog post, we’ll take a look at what’s driving the dip and discuss the implications for potential buyers.
Overview of Singapore Condo Resale Prices
The overview of Singapore condo resale prices in January 2023 paints a promising picture. Despite a 0.6% dip compared to December, prices are still 6.4% higher year-on-year in the CCR, 7.8% higher in the RCR and 9.7% higher in the OCR. Furthermore, this is the first dip in over two years for resale prices, and prior to last month’s downturn, condo resale prices had been rising for 29 consecutive months. Looking at individual districts, District 2 (Chinatown, Tanjong Pagar) saw the most significant dip in asking prices (6.29%), yet its median asking price of $2,407 psf is still much higher than the average price gap between non-landed resale properties and new launches. These figures indicate that Singapore’s housing market is resilient despite the impact of Phase 2 restrictions and the Covid-19 pandemic on property transactions.
Analysis of January 2019 Resale Prices
In January 2019, overall condo resale prices fell for the first time in over two years, according to figures from real estate analytics firm SRX. Prices decreased by 0.6% compared to December of that year, when prices increased by 0.7%. The decline was driven by a 22.6% year-on-year dip in transactions and a 0.8% month-over-month decrease in the benchmark townhouse price to $227.1k. This represented a 1.9% yearly drop. While this was the first time resale condo prices had fallen since December 2018, they had generally been trending lower over recent months prior to the decline. These figures indicate that the Singapore condo resale market is continuing to experience fluctuations and that buyers should be mindful of market trends when considering a purchase.
Long-term Trend of Singapore Condo Resale Prices
The long-term trend of Singapore condo resale prices is one of steady growth. Although prices dipped in January 2019 for the first time in over two years, overall prices have been on a steady increase since 2018. This is in spite of the impact of Phase 2 restrictions and the Covid-19 pandemic on the housing market. The average price gap between non-landed resale properties and new launches is also a staggering $1,074 psf in Q4. Comparatively, the median capital gain for resale condos was $278,000 in January. This indicates that despite dips in the market, there has been a steady upwards trend overall in Singapore condo resale prices.
Impact of Phase 2 Restrictions on Resale Prices
In January 2021, the Singapore government announced Phase 2 restrictions in response to the Covid-19 pandemic. These restrictions had a significant impact on the condo resale market, with prices falling for the first time in over two years. Prices in the Core Central Region (CCR) dropped by 0.6%, while prices in the Rest of Central Region (RCR) and Outside Central Region (OCR) fell by 7.8% and 9.7% respectively. This was despite prices rising by 0.7% in December 2020. The restrictions have also resulted in a decrease in transactions of over 22%. Despite this short-term decrease, overall condo resale prices are still higher year-on-year, rising by 6.4% in the CCR, 7.8% in the RCR and 9.7% in the OCR. Barclays’ property analyst Tricia Song attributed this dip to a reduction in pricing for high-end properties, as well as an increase in supply of newly launched projects that offer discounts compared to existing resale properties.
Average Price Gap Between Non-Landed Resale Properties and New Launches
The average price gap between non-landed resale properties and new launches is a staggering $1,074 psf in Q4. This is a significant increase from the $972 psf gap recorded in the same quarter of 2018. This suggests that buyers are more willing to pay a premium for new launch projects compared to resale properties. The trend of buyers paying a premium for new launches is further evidenced by the fact that new sales made up 54.9% of the total non-landed private residential transactions in Q4 2020. It appears that despite restrictions imposed during the pandemic, buyers are still eager to purchase new homes and are willing to pay a higher price for them.
Comparison Between 2018 and 2020 Resale Prices
The Singapore condo resale market has seen some ups and downs over the past few years. In 2018, the average price of a condo resale unit was $478 psf, but by 2020, this had risen to $511 psf – an increase of 6.4%. This is indicative of the overall trend in prices for private non-landed properties in Singapore, with prices continuing to rise despite a dip in January 2019. The Phase 2 restrictions imposed in mid-2020, however, have had an impact on the market, leading to a decrease in transactions, but not prices. Despite this, analysts predict that resale prices will continue to grow over the coming years.
PropertyForSale Analyst’s Prediction for 2023
PropertyForSale analyst predict that in 2023, resale HDB and private property prices will moderate amid a strong supply of new homes. This prediction follows the long-term trend of Singapore condo resale prices seen in January 2019, which saw an overall dip for the first time in over two years due to the impact of Phase 2 restrictions. This is further compounded by the average price gap between non-landed resale properties and new launches, which was a staggering $1,074 psf in Q4. Despite the uncertain economic outlook and the current oversupply situation with 31,948 unsold homes, Singapore’s housing market is likely to show signs of growth with sales and prices expected to rise in 2023. The PropertyForSale analyst believes that this growth could be hindered by the ongoing Covid-19 pandemic as it continues to affect global financial markets.
Impact of the Covid-19 Pandemic on the Housing Market
The COVID-19 pandemic has had a significant impact on the Singapore housing market. Prices of landed property fell by 1.7 percent, compared to 3.6 growth in the quarter before, while non-landed property prices fell by 1 percent. At one point, there were predictions that resale flats and private home prices might fall as much as 10 per cent, after the December 2021 Phase 2 restrictions. Assessing the impact of COVID-19 on real estate markets is challenging due to their rarity, but analysts have predicted that residential property prices are expected to rise between 1% to 4%. This is a stark contrast from the 10.6% increase in private home prices seen in 2021. Overall condo resale prices fell by 0.6 per cent compared with December, when prices rose 0.7 per cent, according to flash figures from February 6th 2022.
The conclusion of this blog is that Singapore’s condo resale market has seen fluctuations in prices over the past two years, with a dip in prices in January 2019 and a further drop due to Phase 2 restrictions. However, the average price gap between non-landed resale properties and new launches has remained relatively consistent. Furthermore, while the Covid-19 pandemic has had an impact on the housing market, prices of private homes and HDB resale flats have remained buoyant. Looking forward to 2023, PropertyForSale analysts predict that prices will remain stable and will continue to be driven mainly by the demand for private housing.
The takeaway from this analysis of Singapore condo resale prices is that the market is still relatively volatile and unpredictable. Prices have been falling since the beginning of the year, but there are some positive signs that indicate a recovery may be on the horizon. The Phase 2 restrictions have had a dampening effect on transactions and prices, but they may rebound in the long term. Additionally, non-landed resale properties are still outperforming new launches in terms of price appreciation. Finally, while the Covid-19 pandemic has caused disruption in the housing market, it is possible that prices will start to recover by late 2023.