More resale condo units changed hands in February after four months of decline, prices up 1.4% - The Straits Times

SINGAPORE - The resale condominium market picked up pace in February, following the Chinese New Year seasonal lull period the month before, with prices rising 1.4 per cent.

More resale condo units changed hands in February, with an estimated 756 units resold, representing a 50.3 per cent increase from the 503 units the month before, according to flash figures from real estate portals 99.co and SRX released on Tuesday.

This comes after four straight months of decline in transactions, which started in October 2022 after the latest round of cooling measures which were introduced at the end of September 2022 to moderate demand in the property market and encourage prudent borrowing.

Measures include a tighter stress test to compute buyers’ eligibility for bank loans and how much they can afford to borrow for the purchase of a property.

Property analysts attribute the pick-up in February’s sales activities to possible pent-up demand after the year-end holiday and Chinese New Year festive lull period. Still, some cautioned that the sales rebound may not be an indication of a market recovery just yet.

OrangeTee & Tie senior vice-president of research and analytics Christine Sun said although transactions rebounded in February, figures are still below the past 12-month average from January 2021 to February 2022.

Fewer units were also resold in February, compared to the 789 units in the same month a year ago, she added.

“Last month’s sales rebound may not indicate a market recovery after the cooling measures,” said Ms Sun, citing global economic uncertainties such as the woes in the financial sector and elevated mortgage rates and borrowing costs as factors that could dampen market sentiments.

PropNex Realty head of research and content Wong Siew Ying said the transaction figure in February is still “relatively subdued” compared to previous years.

For instance, a total of 3,730 resale condo units changed hands in the first quarter of 2021 while the figure stood at 2,860 units for the first quarter of 2022, said Ms Wong.

In comparison, an estimated 1,259 units have changed hands in the first two months of 2023 – which suggests that the overall volume is on track to underperform compared to the previous two years, she added.

“We believe the tightening of lending requirement and the 15-month wait-out period implemented in September, as well as the high interest rates have collectively weighed on resale market activity in recent months, as buyers become more cautious amid uncertainties,” said Ms Wong. “We anticipate resale condo price growth could be muted as buyers turn more prudent due to the elevated interest rates.”

Mr Pow Ying Khuan, head of research for 99.co, noted that the increased transactions could also be due to buyers rushing to complete their purchases in mid-February when the Buyers’ Stamp Duty (BSD) was increased for higher-valued properties.

Adblock test (Why?)