Resale condo market set for rebound with new rate cuts and launches

The market is expected to rebound following two consecutive months of decline.

Condo resale volume dipped for the second consecutive month in September, decreasing 5.3% month-on-month (MoM) to 1,026 units resold from 1,084 units in August, according to SRX.

Experts believe that the possibility of further Fed rate cuts ahead is keeping buyers from purchasing at the moment.

“With the US Fed signaling further cuts ahead, some buyers could hold off on buying a resale property for now, especially if they do not have urgent housing needs,” Wong Siew Ying, Head of Research and Content at PropNex said.

Looking ahead, resale volume may also decline further as many will be going overseas for the holiday season, “However, sales may rebound after the year-end holidays, especially if the US Federal Reserve announces more possible rate cuts in the upcoming months,” Christine Sun, Chief Researcher & Strategist at Orangetee said.

Mark Yip, CEO of Huttons Asia added that the resumption of launches after the Lunar Seventh Month also led to slower activities in the resale condo market in September.

Sun shared a similar statement, “The lower sales could be influenced by the anticipation of several new project launches lined up from September to November, where buyers have an increased array of home choices in the primary market,”

Aside from having more options in upcoming launches, Yip said that buyers will have bigger budgets, following the interest rate cut.

“Transaction volume may be around 1,000 units for the next 2 months. Prices of resale condo may rise by 4% to 6% in 2024,” he said.

In addition, Wong said that despite a fall in transaction volume, the SRX noted that condo resale prices rose by 0.8% MoM in September, and prices were up by 4.4% year-on-year (YoY) from September 2023.

“Even though resale condo prices have inched up, the median unit price gap between new non-landed private homes and resale homes remains wide, as new project launches tend to contribute to firmer prices,” Wong said.

“Notwithstanding the slight decline in sales, we think the resale market has been a bright spot in the private residential market in the past months. On a year-on-year basis, SRX report showed that condo resale volume was up sharply by nearly 36% from 756 units in September 2023,” Wong added.