Local private home resale prices rebound in February, transaction volumes jump 50.3% month-on-month

As buyers returned to the market after the festive holidays, Singapore's non-landed private home resale prices rebounded by 1.4% month-on-month (MoM) in February, reversing a brief dip in January.

Analysts noted that, beyond the post-holiday momentum, the widening price gap between new launches and resale properties also drove demand for resale homes. However, amid global economic uncertainties and elevated interest rates, price growth for resale private homes is expected to moderate this year.

Flash estimates released on Tuesday (28 March) by property portals 99.co and the Singapore Real Estate Exchange (SRX) showed that non-landed resale prices halted their decline to rise by 1.4% overall in February, while transaction volumes jumped 50.3% MoM to 756 units.

Resale prices in the Outside Central Region (OCR), representing mass-market homes, and the Rest of Central Region (RCR), representing mid-tier homes, rose by 2.3% and 1.4% respectively in February. Conversely, prices in the prime Core Central Region (CCR) slipped 0.3% MoM.

Year-on-year (YoY), overall non-landed resale prices were up 9.2%, with the CCR, RCR, and OCR recording increases of 6.6%, 7.3%, and 11.5% respectively.

The price rebound in February was largely driven by buyers returning to the market following the year-end festivities and Chinese New Year. In addition, the widening price gap between new launches and resale private properties was a key catalyst spurring resale demand.

Home viewings surged significantly compared to January. Among prospective purchasers, property investors were keen to tap into the buoyant rental market by acquiring move-in ready resale homes for immediate rental returns.

The hike in Buyer’s Stamp Duty (BSD), which took effect on 15 February, had minimal impact on the resale market. Before the revision, resale homes priced at $1.5 million and above accounted for 20% of total transactions for the month; after the revision, this share rose to 28%.

Mohan Sandrasegeran, Senior Analyst for Research at One Global Group, noted that softer resale prices in January enhanced their appeal to potential buyers. Buyers who had previously been priced out due to tight budgets began exploring market opportunities once again.

Private Home Price Growth Likely to Moderate This Year

Nevertheless, despite the rebound in transaction volumes, figures remained below the 12-month average of 965 units and the 789 units recorded in the same period last year. Heightened global economic uncertainties sparked by the banking crisis, coupled with borrowing costs and mortgage rates that are likely to stay elevated for some time even if the US Federal Reserve slows its rate hikes, suggest that February’s sales rebound may not necessarily signal a sustained market recovery.

Tighter mortgage financing regulations and the 15-month wait-out period for private home owners downgrading to non-subsidised HDB resale flats have also exerted a cooling effect on the private resale market. Headwinds such as geopolitical tensions and rising layoffs have made buyers more cautious, and resale price growth is expected to slow down in the months ahead.

However, thanks to prompt action by the US government, the banking fallout is not expected to have a severe impact on the local property market. A more modest rate hike by the Fed in March has slowed the pace of mortgage cost increases, helping to support resale transactions. Additionally, HDB upgraders will continue to underpin the private resale sector, with full-year resale volumes projected to reach around 12,000 units.

NUS Data: Non-Landed Resale Prices Up 1.1% MoM in February

Separately, flash data for the NUS Singapore Residential Price Index (SRPI) released by the Institute of Real Estate and Urban Studies (IREUS) at the National University of Singapore showed that overall non-landed private residential resale prices rose 1.1% MoM in February, quickening from the 0.1% increase in January.

Small units rebounded by 1.5%, clocking the largest price gain. Meanwhile, the sub-indices for the Central Region and Non-Central Region (excluding small units) rose by 1% and 1.1% respectively.

As foreign buyers make their return to Singapore, prime large-format units in the city centre are expected to see healthy demand, supporting price growth over the course of the year.