The price gap between condos for sale in CCR and RCR is the smallest it has been in 22 years

In the third quarter, prices of private homes for resale in Singapore increased slightly in all three segments.

OrangeTee & Tie reported on Tuesday that prices of non-landed or landed homes in Core Central Region (CCR), excluding Executive Condominiums (ECs), rose 0.3 percent to S$2,087 psf (per square foot) in Q3 2020 from S$2,080 psf (per square foot) in Q2 2030.

In Q3 2023, the resale price of homes outside the Central Region increased by 2.2 percent to S$1,421 per sq. ft.

According to the report, the gap in median prices per square foot between CCRs and RCRs – excluding ECs – has decreased from 24.1% in the previous quarter and 27.5% in Q1.

Christine Sun, Senior Vice-President, Research and Analytics at OrangeTee & Tie, stated that the price difference in Q3 was at its lowest level since Q3 of 2001, at 14.5%.

Sun stated that the price difference between non-landed homes for sale in the RCR and those in CCR has grown faster in recent years.

She added that the price difference narrowed significantly after the onset pandemic. In Q3 of 2023, the median price for resale condominiums in CCR rose by 13.6% to S$2,011 per sq ft and increased 26.8% to S$1,711 in RCR.

Sun attributes the recent price increase in the RCR to the fact that more condos have obtained their temporary occupancy permits (TOP). These condos tend to sell for higher prices at resale than older ones.

Around 12,800 units achieved TOP status in the RCR between 2020 and H1 2023. This is more than the 3,300 estimated units that were in the CCR. Sun added that the demand for homes on the city fringe is higher because they’re still cheaper than luxury properties.

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The Hungry Ghost Festival, as well as higher interest rates in the past two quarters have contributed to a slower resale market. According to the Urban Redevelopment Authority Realis data for Q3 2023 2,748 units (excluding ECs) were sold, compared with 3,121 in the prior quarter.

CCR resale volumes dropped by 15.3 percent to 476 from 562 in Q2, and RCR resale units fell 15.3 percent to 808 from 954 in the same time period.

The suburbs and OCR saw the lowest declines in sales volume, with a drop of 8.8 percent to 1,464 homes in Q3, down from 1,605 in Q2.

Sun anticipates that demand for condos will remain strong, particularly in OCR and suburbs.

She added that the increased availability of resale homes on the market may “help to mitigate runaway prices in secondary markets”.

Sun said that the total resale volumes (excluding ECs), may be between 10,000 and 12,000 units in 2023. The overall resale price may increase at a slower rate of 4 to 6 percent in 2023 compared to 8.7 percent in 2022.