Non-landed private home resale prices up 0.4% m-o-m in May

Overall resale prices of non-landed private homes in Singapore climbed for the fourth consecutive month, rising 0.4% month-on-month in May, though the pace of growth slowed significantly from the 1.3% increase recorded in April. Meanwhile, resale transaction volume fell 5.5% month-on-month in May.

Analysts project that the resale market will likely moderate further in June due to the mid-year school holidays. 

A dearth of new private home launches in May steered prospective buyers towards the secondary market, lending support to resale price growth. Despite the onset of the school holiday season, resale transactions remained largely resilient.

Flash estimates revealed that across the different market segments, non-landed resale prices in the city-fringe Rest of Central Region (RCR) and suburban Outside Central Region (OCR) both advanced by 0.3%, whereas prices in the prime Core Central Region (CCR) held flat. 

On a year-on-year basis, resale prices in the RCR and OCR expanded by 6% and 5.7% respectively, while the CCR registered a 1.9% decline.

In terms of transaction volume, a total of 1,084 units were transacted in May, down 5.5% from 1,146 units in April. Nevertheless, volume was still 7.2% higher than the same period last year and 19.2% above the five-year average for the month.

Mass-market suburban homes accounted for over half of all transactions, mid-tier city-fringe homes made up 31.3%, while prime homes saw the lowest share at just 17.1%.

Private Resale Market Largely Anchored by Local Buyers

The resale market for mid-tier and mass-market homes is underpinned by robust domestic demand, rendering it significantly more stable than the prime segment.

The concentration of resale transactions in the OCR highlights that the secondary private housing market is primarily supported by HDB upgraders and local owner-occupiers.

Moreover, with a noticeable price premium attached to new launches, buyers are increasingly turning to the resale market for more cost-effective alternatives.

HDB residents accounted for 33% of private resale purchases in May, with nearly 80% having a budget of up to $2 million. 

Foreign buyers accounted for 19 transactions in May, holding steady from April. Among them, 13 were US nationals, three were from Switzerland, and the remainder hailed from Germany, India, and Vietnam.

The priciest non-landed resale transaction in May was a 6,684 sq ft unit at St Regis Residences, which changed hands for $14 million to a Singaporean buyer.

Analysts widely anticipate that the private resale market will remain quiet in June amid the holiday lull, before sales momentum picks up again in July.

Weighed down by the school holidays, resale volumes in June could dip by around 30% to between 600 and 700 units; however, full-year private resale prices are still projected to grow by 4% to 6%.

According to the flash estimates, overall private home resale prices rose 4.2% year-on-year in May.