For the third consecutive month in September, the prices of Housing Board resale flats increased, with demand remaining high after the nearly two-month circuit breaker period.
Compared with August, HDB resale prices increased by 0.8 percent in September, a faster rate than the previous two months, and were 3.1 percent higher year on year.
In April 2013, however, they were only 11.4 per cent lower than their high.
In total, 2,489 HDB resale flats changed hands in September, a 2.2 percent rise from August, flash estimates showed on Thursday (Oct 8) from real estate portal SRX.
Year on year, the amount of resales in September is 32.7 percent higher than the year before.
September is also the fourth consecutive month in which monthly sales exceeded 2,400 units and is above the 1,842 units sold before the Covid-19 pandemic for the two-year monthly average (between Jan 2018 tod Dec 2019).
Since the third quarter of 2016, the HDB resale market has produced the highest quarterly sales, with 7,394 units sold from July to September, said Christine Sun, head of research and consultancy at OrangeTee & Tie.
“This implies that, despite the circuit breaker time , economic slowdown and Covid-19, the overall demand for the HDB resale market is generally healthy this year,” she said. She added that this year, as in previous years, the Hungry Ghost Festival failed to place a dent in housing demand.
The demand may have been fuelled by young couples who, after seeing the longer completion period of newly launched Build-To-Order projects, switched to HDB resale flats, where some have a wait of four to five years, said Ms Sun.
Compared with a year ago, prices for all HDB resale flat forms have also increased across the board.
The highest price rise for four-room flats was 2.7 percent, followed by three-room and executive flats by 2.5 percent, and five-room flats by 2.2 percent.
In September, for a five-room flat at The Pinnacle at Duxton in Tanjong Pagar, the highest transaction price for a resale flat was $1.26 million. It was one of 8 HDB secondary flats that were sold that month for at least $ 1 million.
Ms Sun noted that for a five-room HDB flat in Cantonment Lane, this appears to be a “all time high” as the largest transacted price before this was $1.23 million.
Nicholas Mak, from ERA Realty, said that increasing HDB resale prices were focused on the proportionately higher number of new HDB flats transacted. Those with remaining leases of 90 years or more are newer HDB flats, including those that recently completed the five-year minimum occupancy period.
“These newer flats will typically have higher prices than the neighboring older flats, which would add to the price index rise,” Mr. Mak said.
Ms Wong Siew Ying, from PropNex, said: “Feedback from our property agents indicates that there is good competition in the market for HDB resale units, so pricing should continue to find support in the months ahead. We believe that this year, amid the pandemic-led economic downturn, the HDB resale market has turned a corner and remains positive about its outlook.”
Mr Mak estimated that this year, which is about the average annual resale volume from 2017 to 2019, about 22,500 to 23,500 HDB resale flats could change hands.
The latest report from SRX also reported that its overall median transaction over X-value (TOX) in September was a positive $2,000 for HDB resale transactions, a decrease of $1,000 compared to August.
Median TOX tests whether individuals are overpaying (in the case of positive TOX) or underpaying (in the case of negative TOX) relative to the estimated market value for flats created by SRX ‘s machine.
Flats in Bukit Batok had the highest positive median TOX of $6,500, while those in Bishan had the lowest negative TOX of $7,000.