Despite Singapore’s worst economic downturn, eight government-built flats were still sold on the resale market for more than S$1 million in September.
A research by SRX Real Estate Portal on Thursday (Oct 8) showed that this includes a five-room Housing and Development Board (HDB) apartment at Tanjong Pagar’s The Pinnacle@Duxton, which sold S$ 1,258 million.
It’s thought to be a record high for a HDB resale flat. In Block 1B of Cantonment Road, the 107sqm unit is located on the 43rd to 45th floor, with a lease that started in 2011.
More than five HDB flats sold for more than S$1 million in August were the last eight transactions.
These million dollar transactions for resale HDB flats, are still outliers and do not reflect overall market patterns.
Mrs Christine Sun, Head of Research and Consulting at OrangeTee Property Firm, said that the number of such transactions appears to have decreased.
There were a total of 38 million dollar transactions for HDB resale units in the first 8 months this year. There have been 64 such transactions for the last year and 71 for 2018.
Ms Sun said, however, that HDB ‘s resale transactions with prices ranging from S$800,000 to S$1 million have increased, indicating that the market supply of units is enough to cushion off stiff competition from raising the price of additional units above S$1 million.
Generally, analysts predict that HDB resale prices set to rise about 1.5 per cent to 3.5 per cent for 2020.
Ms Wong Siew Ying, Head of Research and Content at PropNex Real Estate Agency, said that the HDB resale rate is likely to have plunged and the market has turned a corner.
In general, rates have been decreasing steadily since 2013, when the mortgage service ratio was introduced. It limits the proportion of a homeowner’s monthly income to 30 per cent, which is used to repay his mortgage.
HDB resale prices have risen by 0.1 per cent over the entirety of the last year.
Analysts have given several reasons as to why the market will continue to be bullish.
Mr. Nicholas Mak, Head of Research and Consulting at ERA, said that a higher percentage of new apartments are being sold, typically defined as leased for at least 90 years.
These include HDB apartments that have recently served a minimum occupation period of five years.
“These newer apartments would usually have higher prices than the older apartments next door,” he said.
OrangeTee’s Ms. Sun said that many of these buyers are young couples.
“With the newly launched BTO (Build-to – Order) projects, some of which are scheduled to be completed just four to five years later, these buyers need immediate roof and are unable to wait for a longer period of completion,” she said.
Mr Mak said that the Covid-19 pandemic is further exacerbating this, with buyers uncertain as to when the BTO projects will be finished, as many construction workers are confined to their dormitories amidst this Covid-19 Pandemic.
Instead, said Ms. Wong of PropNex, the economic downturn lure some interest for property hunters who wish to upgrade to a private condominium to shift to the HDB resale market.