Buyers Seek Move-In Ready, Affordable Homes as Resale Market Regains Appeal

February Private Home Resale Volumes Rebound as Practical Buyers Return to the Market

Amid a wave of strong new launch sales, Singapore's private residential market is exhibiting another subtle trend: resale transaction volumes for non-landed private homes rebounded by 16.1% month-on-month (MoM) in February, reversing January's decline. Conversely, resale prices saw their first correction after three consecutive months of gains, dipping 0.4% MoM.

This combination of factors signals a noteworthy shift in the private resale market outlook.

According to flash estimates, 1,024 non-landed private home resale transactions were concluded in February, marking a noticeable recovery from 882 units in January and bouncing back from the previous month's 11.6% contraction.

While transaction volume picked up, overall prices showed signs of consolidation. Overall resale prices softened by 0.4% MoM, with the Rest of Central Region (RCR) and Outside Central Region (OCR) falling by 0.5% and 0.4% respectively. In contrast, prices in the Core Central Region (CCR) bucked the trend, inching up by 0.3%.

Nevertheless, on a year-on-year (YoY) basis, overall resale prices remained resilient, charting a 5.8% increase.

Shifting Transaction Dynamics: Buyers Favour Practical Locations and Immediate Occupancy

In terms of geographical distribution, about 48.2% of February's resale deals took place in the suburban OCR, 33.3% in the city fringe RCR, and only 18.5% in the prime CCR. This breakdown suggests that the majority of buyers continue to lean towards practical locations that offer price advantages and daily convenience, reflecting a market fundamentally driven by owner-occupier demand.

Since November 2023, the resale market had been on a gentle downtrend, primarily because a steady stream of new launches diverted buyers' attention. In particular, major project rollouts in early 2024, such as Parktown Residence in Tampines and ELTA in Clementi, drew substantial interest away from the secondary market, dampening resale demand.

Slower property-hunting activity during the Chinese New Year period also contributed to January's subdued volume, meaning February's rebound partly represented a natural recovery from this seasonal holiday effect.

Strategic Pricing Adjustments Behind the Price Dip

Although resale prices eased marginally, market watchers believe this does not indicate market weakness, but rather a strategic adjustment by sellers in response to keen competition from new launch developments.

Against the backdrop of relatively lower interest rates, new home sales have hit record highs, with total new private home sales in February reaching a 13-year high for that same period. Under such conditions, resale sellers must adjust their pricing strategies to stay competitive.

Compared to new launches, resale units generally offer more competitive price points as well as the distinct advantage of immediate occupancy—an ideal proposition for buyers unwilling to wait out the construction period. This factor remains highly appealing to a segment of buyers and likely explains why resale volume staged such a solid recovery in February.

Even so, with mega launches like Parktown Residence and ELTA performing strongly, these new developments inevitably siphoned off prospective buyers who might otherwise have turned to the secondary market, leading to gentle price moderation across both the OCR and RCR.

Market Outlook: New Launch Momentum Persists as Resale Market Navigates Competition

On the interest rate front, borrowing costs remain relatively moderate and significantly lower than the same period last year, continuing to underpin strong demand for new launches. Analysts note that if new project launches sustain their brisk sales pace, the resale market may remain under pressure in the coming months. Some motivated sellers may be prompted to trim their asking prices further to secure quicker transactions.

Nonetheless, over the longer term, the resale market enjoys steady underlying demand. For families who require immediate move-in readiness or have specific locational preferences, resale private homes remain an irreplaceable choice.

Overall, February's market performance reaffirms how buyers weigh their options between different project types, while highlighting the nuanced interplay between the primary and secondary markets. Moving forward, how the resale market maintains its edge will test sellers' pricing flexibility as well as the intrinsic value proposition of their properties.