Updates on the condo resale market

With the real estate market in the hots despite the COVID-19 pandemic, the condominium resale market is not sitting out on this hype.

In April this year, condominium resale volumes hit the highest monthly volume ever recorded since 2010 with almost 2000 resale units sold. As resale prices continue to climb upwards, we explore the possibility of why condominium resale units have been rising and how this may impact the market.

HDB Upgraders

Analysts have posited one of the main push factors for the rise in condominium resale volume to be HDB upgraders. With a lot of HDB homeowners hitting their minimum occupation period (MOP) of 5 years, they have decided to upgrade to a private property and sell their HDB. This statistic takes up more than half of the resale volume outside of the central region.

Anticipated Cooling Measures

With talks of anticipated cooling measures to be implemented by the government, it is no surprise that many would flock to the resale market and leverage upon the opportunities they have now before more cooling measures affect their purchasing power. Some of the cooling measures expected to be implemented by the government include higher Additional Buyer Stamp Duty (ABSD) rates - which requires property owners to pay a sum from their second and subsequent properties - as well as a decreased cap of Loan-to-Value (LTV) ratio to 75%. This may explain the reason why most people are seizing the chance to get a property now and hit the resale market.

Impact of COVID-19

The global pandemic may have put a dampener in various economies, but many enthusiastic property investors have been analysing the trends in the market and charted out forecasts. As such, most have deduced that it is a better investment to buy properties during the time of the pandemic now so that when the economy starts to gain traction and open up again, prices will increase and they will get higher capital returns.

With this increase in demand for condominium resale units, it is likely that there will be a continual upward price trend in the near future. This will result in prices in the market steadily rising as well. Resale condominium units typically attract buyers who are looking at upgrading their HDB flats to a private property, have recently not been able to get the keys to their BTO flats, or are searching the market for a place within their budget.

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