Singapore condo resale volume declines for the second straight month in September

Sales declined by 5.3% MoM to 1,026 units.

Singapore condo resale volume dipped for the second straight month in September, according to SRX’s latest report. An estimated 1,026 condos were resold in September, down by 5.3% MOM compared with 1,084 units in the previous month. 

Wong Siew Ying, Head of Research and Content, PropNex, says, “notwithstanding the slight decline in sales, we think the resale market has been a bright spot in the private residential market in the past months. On a year-on-year basis, SRX report showed that the condo resale volume was up sharply by nearly 36% from 756 units in September 2023.”

Here’s more from PropNex:

We think a possible reason for the moderation in sales in September could be that some buyers have been for the US Federal Reserve rate cut – which was announced in mid-September – to get more visibility on where interest rates may be headed before they make a purchase decision. With the US Fed signalling further cuts ahead, some buyers could hold off on buying a resale property for now, especially if they do not have urgent housing needs. 

Since the Fed rate cut announcement, we note that the 3-month Compounded SORA which banks used to price home loan packages have moderated marginally. In mid-September, the 3M SORA was at around 3.54% p.a. compared with 3.42% p.a. as at 24 October 2024.

Despite a fall in transaction volume, the SRX noted that condo resale prices rose by 0.8% MOM in September, and prices were up by 4.4% from September 2023. Even though resale condo prices have inched up, the median unit price gap between new non-landed private homes and resale homes remains wide, as new project launches tend to contribute to firmer prices. Based on URA Realis caveat data, the median $PSF price gap was 45% in September, widening from the past months where the price gap hovered at around 30% to 38% (see Chart 1).

Chart 1: Median unit price ($PSF) of non-landed private homes by type of sale

We expect the sizable price gap between non-landed new and resale properties, prospects of further rate cuts, and the general uplift in market sentiment to be supportive of the private residential resale segment over the next few months. The resale volume may see a boost when some buyers who are sitting on the fence return the market should there be a meaningful decline in borrowing costs.