While resale condominium prices have indeed risen for a few consecutive quarters, the sales volume has not reflected the same rise.
Would the most recent property cooling measures then be considered premature?
Rate of increase in property prices may be too quick
Prices of resale condominium units rose 0.2% in June, making it a 10.6% rise from June 2017. Average prices of this property segment rose 3.8% in the second quarter. Core central region (CCR) prices rose 0.1% in May and in a year-on-year comparison, prices have climbed 10.9% since June last year.
The market is well-headed towards a recovery and most of the other regions also recorded price-increments. In the 0utside of the central region (OCR), resale prices rose 0.4% and is now 11.6% higher than last year.
Considering the fact that private property prices fell 11.6% over 5 years, this 1-year recovery is rather quick, which is why the authorities are now clamping down on investment buyers and developers racking up land sites at high prices.
Resale condo prices rise but sales volume fall
Sale volume of resale condominium units, however, fell 25.5% last month. 1,128 units were sold in June, down from the 1,514 units in May. Compared to the peak of April 2010 when 2,050 units were sold, June’s numbers were 45% lower.
The number of units sold last month is however still 4.6% higher than last year’s. This could be partly due to the number of homeowners displaced by en bloc sales looking for replacement homes.
The increased number of new launches by developers last quarter may also have diverted buyers’ attention away from the resale market.