HDB resale transactions for second quarter at four-year high, crossing 6,000 mark

HDB housing blocks near Commonwealth Avenue West.
HDB housing blocks near Commonwealth Avenue West. PHOTO: ST FILE

SINGAPORE - The Housing Board resale market saw a spike in transaction volume from the last quarter and hit a four-year high, according to latest official figures.

Analysts said this was due to a confluence of factors, such as new increased Government grants, and a stable resale market that is giving buyers the confidence that prices are unlikely to drop much further. 

On Friday (July 28), the HDB said that the number of resale transactions increased by 32.5 per cent, from 4,530 in the first quarter of this year to 6,001 in the second quarter.

The last time transactions for a quarter crossed the 6,000-mark was in the third quarter of 2012, when 6,560 resale applications were registered.

The latest data also showed that the resale price index dipped by 0.1 per cent from the first quarter of this year to the second. Observers said this was in line with the largely stable prices for the last few years. Resale prices have been on a gradual decline since 2013. 

The stability has continued to entice more buyers, especially young couples, into the resale market, PropNex chief executive Ismail Gafoor said. 

Resale volume has been on the rise since the record low of 17,318 in 2014: there were 19,306 sales in 2015 and 20,813 last year. Mr Gafoor said he expects transactions to cross the 22,000 mark this year. 

Recently enhanced grants have also helped, he said. Earlier this year, the Central Provident Fund Housing Grant was raised to $50,000 for those buying four-room or smaller resale flats, and to $40,000 for those buying five-room or larger resale flats. It was previously capped at $30,000 for both categories. 

Some new buying patterns have also emerged, say the experts. 

“Older flats are facing a slowdown in demand as buyers are concerned about the expiring lease,” said property consultancy Edmund Tie & Company research head Lee Nai Jia. 

This follows the debate sparked by National Development Minister Lawrence Wong’s blog post in March, in which he cautioned buyers of older resale flats against paying high prices on the assumption that such flats would later be acquired by the HDB for future development, and owners compensated at market value. 

Mr Lee added that “larger units near developments that have successfully completed a collective sale are likely to see stronger demand and an increase in price.”

Earlier this week, privatised HUDC estate Serangoon Ville in Serangoon North Avenue 1 was sold for $499 million – the sixth en-bloc deal so far this year. 

In August, HDB will offer about 3,850 Build-To-Order (BTO) flats in Bukit Batok and Sengkang. 

It will also offer 1,394 unsold balance flats in its first Re-Offer of Balance Flats exercise, which are units left over from the November 2016 Sale of Balance Flats exercise.