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Singapore's shophouse transaction value up 29.9% in H1 2021


By Yong Jun Yuan

Resale condominium prices in Singapore were up 0.1 per cent month on month in June, while prices rose 6.8 per cent year on year, flash figures from SRX Property showed on Tuesday.

An estimated 1,510 units were resold in June, a decrease of 12.6 per cent from the 1,727 units resold a month earlier. However, volumes were 198.4 per cent higher than in June 2020, and 83.9 per cent higher than the five-year average for the month of June.

Property analysts from both OrangeTee and Tie and PropNex attributed the fall in resale volume to fewer viewings being conducted due to the country's Phase 2 (Heightened Alert) measures from May 16 to June 13.

Huttons' analysts were surprised, given that the other segments of the market had seen a rebound in activities after the lifting of the viewing restrictions. They attributed the fall in resale volumes to price resistance from buyers, which also resulted in lower volume as well as lower capital gains in June.

Still, Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said demand remains at a healthy level and the month-on-month sales decline may likely be temporary.

"Sales may rebound this month since viewing restrictions have been further eased and some people may rush to close a deal before the start of the seventh lunar month which falls in August," she said.

Meanwhile, all regions saw price increases year on year, as the core central region (CCR), rest of central region (RCR) and outside of central region (OCR) rose 6.2 per cent, 6.5 per cent and 7.1 per cent respectively.

Month on month, prices in the CCR and OCR gained 1.7 per cent and 0.1 per cent respectively, while prices in the RCR slipped 1.2 per cent.

Analysts from PropNex and OrangeTee & Tie both credited the limited supply of new homes with diverting people towards resale homes, potentially keeping their prices up in the coming months.

Ms Sun said that as the supply of new homes remains limited and more HDB upgraders turn to the private resale market, prices may continue to rise in the coming months.

SRX attributed more than half of resale volumes in June to the OCR, 23.7 per cent from the RCR, and 17.9 per cent from the CCR.

"Since supply is most limited in the suburban segment, price growth may be steepest for mass-market resale homes," Ms Sun said, citing the higher rise in OCR prices compared to the other regions.

PropNex's head of research and content Wong Siew Ying said that while a number of new OCR launches are slated to come on soon, the price gap between new launches and resale properties could also push price-sensitive buyers towards the resale market.

"In addition, some buyers may prefer ready-built homes in the resale market to avoid uncertainties around completion delays for new projects. Hence, we expect the overall demand for resale homes to remain relatively strong," Ms Wong added.

A unit from Sculptura Ardmore saw the highest transacted price for a resale unit in June at S$19.8 million. In the RCR, the highest transacted price was S$5.7 million for a unit at Regency Suites. In the OCR, the most expensive unit resold was a unit at Clementiwoods condominium that was resold for S$2.8 million.

SRX's overall median capital gain stood at S$170,000 in June, a decrease of S$20,800 from a month ago. District 21 (Clementi/Upper Bukit Timah) saw the highest median capital gain at S$535,000, while District 4 (Sentosa/Harbourfront) posted the lowest median capital gain at S$66,770.

SRX calculates the capital gain or loss of a condo resale unit by comparing the current transacted price with the same unit's previous transacted price. Capital gain data is only available for districts with more than 10 matching transactions.

Adapted from: The Business Times, 14 July 2021


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Did You Know?


The Total Debt Servicing Ratio (TDSR) and the MSR (Mortgage Servicing Ratio) are frameworks introduced to ensure mortgage is serviceable by mortgagors. According to the Monetary Authority of Singapore (MAS), the TDSR has the effects of a property cooling measure but is not used as a cooling measure policy. It is used to encourages financial prudence among buyers and strengthen credit underwriting practices of financial institution. It is a form of stress test instead of cooling measure. The MSR is calculated differently but achieves the same objective.


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