Resale condos in prime districts and city-fringe areas see smallest price gap in 22 years: OrangeTee & Tie
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The price gap between resale condos in the Core Central Region (CCR) and the Rest of Central Region (RCR) continues to narrow, according to a research report by OrangeTee & Tie. In 3Q2023, the gap stood at 17.5%, the narrowest since 3Q2001, when it was at 14.5%.
This is largely due to rising prices in the RCR, which have grown 26.8% since 3Q2020, compared to the 13.6% recorded in the CCR. This contrasts with the pre-pandemic situation, when the median prices of CCR resale condos grew at a faster rate of 15% than the 8.5% for RCR condos.
The performance has been attributed to new condos completing in the RCR, as well as robust demand. Between 2020 to 1H2023, 12,800 condo units obtained their temporary occupation permit, far exceeding the estimated 3,300 units in the CCR. Added to that, private homes in the city fringe are more affordable than luxury homes, making them attractive to buyers.
Resale condo prices in 3Q2023 overall increased 0.9% q-o-q to $1,631 psf, reversing from the 0.4% q-o-q decline recorded in 2Q2022. Driven by the landed segment, which saw prices surge 13.1% q-o-q, prices in the Outside Central Region (OCR) rose 2.2% to $1,421 psf, while in the RCR, prices went up 1.3% to $1,744 psf. In the CCR, prices inched up 0.3% q-o-q to $2,087 psf.
Resale volume however, fell 12% q-o-q to 2,748 units in 3Q2023 due to slower sales during the seventh lunar month and higher interest rates. There was a decline of 15.3% q-o-q to 476 units in the CCR and 15.3% q-o-q to 808 units in the RCR. In the OCR, the drop was 8.8% q-o-q to 1,464 units.
Luxury condos in the resale market may be more attractive to buyers as the narrowing price gap is encouraging. However, demand is also likely to stay high for condos in the suburbs, as they offer bigger living spaces and are still more affordable than their counterparts in the city fringe. With prices still on the rise, buyers may want to consider investing in the resale market sooner rather than later.