The private resale market has reached a new pinnacle, underscoring its dominance in the real estate sector. Despite the prevailing high interest rates and the multiple cooling measures, demand for resale homes has seen a revival.
The Urban Redevelopment Authority’s (URA) data shows that the volume of resale home transactions has demonstrated a robust recovery, posting an 11 per cent increase from 7,980 units in the period from January to August 2023 to 8,823 over the same period in 2024.
The market resurgence is significant when juxtaposed against the protracted market stagnation after the implementation of the total debt servicing ratio in 2013.
During the initial eight months of each year from 2013 to 2017, an annual average of approximately 5,300 units were sold.
Another indicator that the resale market has gained significant ground is the market share relative to the total private home transactions, which stood at an impressive 72 per cent in the first eight months of 2024. This is a substantial increase from 58 per cent within the same timeframe in 2023. In August 2024, the proportion of resale transactions climbed further to 78 per cent.
The demand for resale properties is expected to remain strong. But who has been driving the market and what types of properties are popular now? We look at the first eight months of 2024 and compare this with the same periods in previous years.
Demand drivers
There was a substantial increase in housing supply, with close to 30,000 private homes completed in the past two years.
As housing stock builds up, the expanding inventory of residences will become accessible for resale, thus broadening the spectrum of housing options for prospective purchasers.
As prices of new homes hold firm, there has been a notable shift towards the secondary market, where many buyers seek lower-cost alternatives, such as leasehold properties or “relatively still new” properties. Some are also interested in older resale condominiums, which are considered to be good value due to the ample space they offer for the price.
In terms of tenure, the resale transactions in 2024 have predominantly comprised leasehold units, which constitute about 60 per cent of the total resale volume, while freehold units made up the remaining 40 per cent.
Among leasehold resale properties, new condos between 10 and 15 years old were the most sought after, comprising 35 per cent of the market share. Newly constructed resale properties under 10 years old represented 19 per cent of the market share.
Likewise, there has been a modest uptick of older leasehold resale properties that were at least 30 years old, with their market share rising slightly to 11 per cent in 2024 from 9 per cent in the preceding year.
Fewer people appear to avoid older properties, likely due to the perceived value for money offered when considering the ample space they provide. Unsurprisingly, resale condos, particularly spacious units in suburban areas, are highly sought after at the moment.
Popular resale condos
The most sought-after resale condos predominantly exist within District 19, encompassing Serangoon Garden, Hougang and Punggol, followed by District 18, which covers Tampines and Pasir Ris.
By market segment, the leading resale projects in the suburbs include Treasure at Tampines, The Minton, High Park Residences, The Tapestry, Kingsford Waterbay, and The Garden Residences.
In the city fringe, the pre-eminent projects are distributed across diverse locations, including Stirling Residences, Parc Esta, Jadescape, Sims Urban Oasis, Reflections at Keppel Bay, Eight Riversuites, Park Colonial, The Interlace, and Queens Peak.
In the prime segment, the most popular projects are Cuscaden Reserve, The Residences at W Singapore Sentosa Cove, D’Leedon, The Sail @ Marina Bay, One Draycott, One Shenton, and Icon. The first two projects saw more sales due to promotional activities run by the developers.
Jump in HDB home upgraders
There is an emerging trend of Housing Board home upgraders purchasing private resale homes.
In the first eight months of 2024, almost one-third of the resale home (landed and non-landed) purchasers were HDB upgraders, rising by 14 per cent from 2023, reaching 2,750 units in 2024.
Many of these flat owners could have opted for resale condominiums, as they could move into their replacement homes without incurring the additional buyer’s stamp duty. Furthermore, they do not need to incur a much bigger loan should they opt to purchase a resale private property after the sale of their HDB flats.
Many HDB upgraders capitalised on the positive market conditions to secure favourable selling prices for their flats. Based on HDB caveat records from data.gov.sg, 5,036 resale flats were transacted at or above $700,000 in 2024, a substantial increase from the corresponding period in 2023, during which 3,517 units were sold. The sales surge is particularly striking compared with the 1,057 transactions registered during the pre-pandemic 2019.
Many flat owners attained the financial capability to upgrade to a private home owing to the robust growth of resale flat prices.
The URA statistics revealed that for 2024, nearly 25 per cent of the private resale homes bought by HDB upgraders were over $2 million each, while 184 units were bought in excess of $3 million each.
Nonetheless, most upgraders still prefer to buy resale condos in the suburbs for the space and price. Popular projects among HDB upgraders in 2024 were mainly in the suburbs, including Treasure at Tampines, High Park Residences, The Tapestry, Botanique at Bartley, The Luxurie, Flo Residence, Kingsford Waterbay and The Minton.
Landed properties continue to draw interest
Despite prices climbing for eight consecutive years, the demand for landed properties continues to draw interest.
The number of landed transactions (excluding strata landed) increased from 825 units in 2023 to 989 in 2024. However, demand for strata landed homes, or cluster houses, dipped slightly from 167 units to 159 units.
Presently, Bedok, Serangoon, Hougang, Bukit Timah, Ang Mo Kio and Pasir Ris are the regions with the highest volume of landed property transactions. The most popular cluster houses are Hillcrest Villa and Belgravia Villas.
Positive outlook
The recent interest rate cuts by the US Federal Reserve are expected to boost the real estate market in the medium to long term substantially. A more favourable credit environment may spur luxury home sales.
Although high-net-worth investors typically exhibit lower sensitivity to interest rate fluctuations due to their affluent financial status and are less inclined to base property purchase decisions solely on mortgage rates, the reduced cost of borrowing could still yield advantages within their broader investment portfolio.
For instance, their businesses or cost of investment in other financial instruments could be lower.
Consequently, this may result in a greater availability of funds or budgets for property acquisitions.
The decline in mortgage rates may also prompt a shift in buyers’ perspectives within the broader market.
Consumers who previously adopted a cautious approach may now perceive the market to have reached a pivotal juncture and be more inclined to re-enter the market. This is because the prospect of financing a home is expected to be more affordable in the foreseeable future, and they need not worry about potential rate increases.
Due to the projected decrease in available stock for purchase over the next few years, resale prices may either stabilise or experience further growth.
The number of condo completions, excluding executive condos, has already decreased from 19,968 units in 2023 to approximately 9,100 units in 2024. Subsequently, completions are set to decline further to around 5,300 units in 2025 and rise moderately to 7,800 units in 2026.
Therefore, the prospects for resale home owners look positive due to the diminishing housing stock in the market and rate cuts, unless the market is impacted by major economic crises or unforeseen circumstances.
Source : https://www.straitstimes.com/business/invest/which-private-resale-homes-are-popular-now