Private home resale prices edge up 0.2% in June, volume falls nearly 30%

Singapore's overall non-landed private residential resale prices rose for the fourth consecutive month, edging up by 0.2% month-on-month in June. However, affected by the mid-year school holidays, resale transaction volume in June plunged by nearly 30% compared to May.

Flash data showed that the drop in private home resale volume was widespread, with overall resale volume declining by 29.9% from 1,153 units in May to 809 units.

The contraction in private home resale volume was more pronounced than expected. The nearly 30% drop in June was larger than the 10.5% holiday dip in December last year, and was also 5.2% lower compared to the same period last year.

Apart from the seasonal lull of the June school holidays, analysts generally believe that marketing campaigns for upcoming new launches and the Build-To-Order (BTO) sales exercise may have weighed on the resale market that month.

June saw eight BTO projects launched, including two in prime locations such as Tanjong Rhu and Holland Village, alongside Tampines and Jurong BTO sites near MRT stations. Due to their prime locations, these projects may have diverted attention away from the private resale market.

Some buyers held off entering the market in anticipation of an imminent interest rate cut by the US Federal Reserve to lower borrowing costs. With more new projects traditionally slated for launch after the June holidays, some buyers may also be waiting for more options to hit the market.

Price gap between new launches and resale private homes reaches 36%

Despite the decline in transaction volume, overall private residential resale prices still recorded a modest 0.2% gain in June, extending the four-month upward trend that began in March. On a year-on-year basis, resale prices rose by 4.3%.

Year to date, the median price per square foot (psf) for non-landed private homes stands at $1,600. The price gap between new private homes and resale private homes widened slightly from 35.8% in May to 36%.

Amid a dearth of major new project launches, coupled with the substantial price differential between new launches and resale private properties, some buyers may turn to the resale market instead. We expect this trend to provide support for the private resale market moving forward.

In terms of regional breakdown, flash estimates show that the price growth in June was primarily driven by mid-tier private homes in the Rest of Central Region (RCR), where resale prices climbed 1.3%. Resale prices of luxury private homes in the Core Central Region (CCR) slipped 0.6%, while prices for mass-market private homes in the Outside Central Region (OCR) remained broadly flat.

Although the private resale market slowed in June, its overall performance in the second quarter of this year remained resilient. Citing data from SRX, it was noted that there were approximately 3,173 non-landed private residential resale transactions in Q2, an increase of 27.2% compared to Q1.