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

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Resale prices for private homes in Singapore rose 0.9% overall during the third quarter of 2023, driven largely by a 13.1% increase for the landed segment. This comes as the gap between prices for resale condos in the Core Central Region (CCR) and the Rest of Central Region (RCR) narrowed significantly, standing at the smallest in over two decades.

According to OrangeTee & Tie’s October research report, resale prices for private homes, excluding executive condos (ECs), stood at $1,631 psf in the third quarter. In the Outside Central Region (OCR), prices rose 2.2% while in the RCR, prices inched up 1.3%. The CCR, by comparison, registered a more modest 0.3% increase.

Going from 24.1% in the second quarter of 2023 to 17.5% in the third, the gap between prices of CCR and RCR resale condos is now the narrowest it’s been since 3Q2001 when the gap was 14.5%.

From 2Q2017 to 2Q2020, median prices of CCR resale condos rose 15%, faster than the 8.5% growth logged for RCR resale condos over the same period. However, since the onset of the pandemic in 3Q2020, the median prices of CCR resale condos have grown 13.6% to $2,011 psf, while the median prices of RCR resale condos have grown a much more robust 26.8% to $1,711 psf.

OrangeTee & Tie’s senior vice president of research and analytics, Christine Sun, attributes this faster price appreciation in the RCR to more new condos having been completed in that region, as well as to higher demand for these relatively more affordable private homes in the city fringes.

On the other hand, the number of resale transactions excluding ECs in the third quarter dropped 12% q-o-q to 2,748 units, with a 15.3% decline each for the CCR and RCR regions while in the OCR, resale volumes fell 8.8%. Sun believes that demand for condos in the suburbs will remain buoyant, with HDB upgraders preferring them for their bigger living spaces and relative affordability.

The narrowing price gap between CCR and RCR condos has made the former more attractive to buyers, although the affordability of the latter may prove to be the decisive factor for many. With luxury condos in the resale market becoming more and more attractive, it will be interesting to see how the market fares in the coming months.