Condo resale market to slow in June: analyst

High mortgage rates may be turning off would-be buyers.

After rising by 8.9% in June, transactions in the condo resale market are expected to slow in June, according to analysts.

Huttons’ Mark Yip said it’s possible that there won’t be any transaction going above S$10m as a result of the cooling measures, coupled with the school holiday season.

Siew Ying Wong, head of research and content, PropNex, noted that would-be buyers are possibly also being turned off from the condo resale market due to mortgage rates.

ALSO READ: Condo resale prices up 9.2% in May
 
“Buyers of resale properties will face the full brunt of the high mortgage rates once the purchase is made, as opposed to buyers of new launches whose mortgage payment amount will be staggered over time, rising gradually in tandem with the new project hitting certain construction milestones under a progressive payment scheme,” Wong said.

A mismatch in price expectations between buyers and sellers, and the limited availability of resale homes on the market may also be to blame for the “moderate” interest in the condo resale market in 2023, Wong said.

In her outlook, OrangeTee's Christine Sun said the buyers may not have enough cash to pay the ABSD upfront even if they can apply for remission after selling their flats. This means some buyers may opt for resale condos that are ready for urgent occupation.

"Several successful new launches may have also reignited the buying interest in the secondary market, especially for affordable resale alternatives in the vicinity," said Sun, Senior Vice President of Research & Analytics.

Sun said more condos may be slated for completion and foresee that more units could be sold in the coming months.