Resale condos in prime districts and city-fringe areas see smallest price gap in 22 years: OrangeTee & Tie

Resale prices for private homes in Singapore continued to narrow in 3Q2023, with the gap between condos in the Core Central Region (CCR) and the Rest of Central Region (RCR) shrinking to 17.5%. According to an October research report by OrangeTee & Tie, this is the smallest gap recorded since 3Q2001.

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Excluding executive condos (ECs), median prices of resale condos in the CCR rose 0.3% q-o-q to $2,087 psf last quarter. Comparatively, median prices of resale condos in the RCR progressed 1.3% to $1,744 psf over the same period.

The landed segment saw resale prices surge 13.1% q-o-q, while the resale non-landed segment dipped 0.9% q-o-q. Prices in the Outside Central Region (OCR) rose 2.2% q-o-q to $1,421 psf in 3Q2023.

Meanwhile, the number of resale transactions excluding ECs in 3Q2023 saw a decline of 12% q-o-q to 2,748 units. In the CCR, resale volume dipped 15.3% q-o-q to 476 units, while the RCR also saw a decline of 15.3% q-o-q to 808 units. In the OCR, resale volume fell 8.8% q-o-q to 1,464 units. This performance was attributed to slower sales during the seventh lunar month and elevated interest rates.

Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, attributed the faster price appreciation in the RCR since the pandemic to more new condos completing in the RCR in recent years. Between 2020 and 1H2023, 12,800 condo units obtained their temporary occupation permit, far surpassing the estimated 3,300 units in the CCR.

Sun further explained that demand is stronger for private homes in the city fringe since they are still more affordable than luxury homes. HDB upgraders prefer such homes for their big living spaces and affordability.

Since the onset of the pandemic, the price gap has narrowed substantially as resale condo prices in the RCR grew faster than those in the CCR. Sun believes that demand for condos in the suburbs will stay resilient, as many may like resale homes that are well maintained and in ‘move-in’ condition.

Luxury condos in the resale market may be more attractive to buyers as the price gap between CCR and RCR homes continued to narrow in 3Q2023. With median resale prices staying in an affordable range, demand for homes in the suburbs is expected to remain resilient.