HDB resale prices up 0.6% in November in biggest month-on-month rise this year: SRX

Non-mature estates' prices increased by 1.0 per cent while mature estates prices stayed flat.
Non-mature estates' prices increased by 1.0 per cent while mature estates prices stayed flat.PHOTO: ST FILE

SINGAPORE - Housing Board resale prices have notched their biggest month-on-month increase this year after higher grants for first-time buyers kicked in, according to flash data from real estate portal SRX Property on Thursday (Dec 5).

Resale prices, which through most of 2019 have moved sluggishly within a -0.2 to +0.2 per cent range, rose 0.6 per cent in November from October. 

Nicholas Mak, head of research and consultancy at ERA Realty, cited the effects of the HDB enhanced housing grant (EHG) kicking in last month, saying the 0.6 per cent month-on-month rise was “the most robust increase in the past 37 months since September 2016, based on SRX data”.

In September, the Government announced higher grants of up to $80,000 for eligible first-time flat buyers, regardless of whether they get a new or resale flat. There are also no restrictions on their choice of flat type and location.

Compared to November last year, resale prices are up by 0.4 per cent, though they are still off by 13.8 per cent from their peak in April 2013.

Prices in non-mature estates rose by 2 per cent year on year,while those in mature estates fell 2 per cent.

Compared to October, three-room, four-room and executive flats saw price increases of 0.1 per cent, 1.2 per cent and 1.1 per cent, respectively, while prices of five-room flats fell by 0.1 per cent.

Prices in non-mature estates rose 1 per cent while those in mature estates were flat.

The volume of sales cooled in November after October saw a jump in the number of resales from the higher grants.

In all, 1,915 HDB resale flats changed hands last month, a 13.5 per cent drop from October's 2,213. However, compared with a year ago, the resale volume was 1.6 per cent higher.

Four-room flats made up 42.5 per cent of the resale units sold last month. Five-room flats accounted for 24.8 per cent and three-room flats 23.6 per cent, while executive flats made up 6.8 per cent. The rest were multi-generation and two-room flats.

Mr Mak said the lower sales activity in November was typical of the traditional lull period for the property market coming to the year-end. “However, this is still above the previous 12-month average resale volume of 1,835 units. This shows that HDB resale volume still remained healthy,” he noted.

 
 
 

SRX forecasts that in the next three months, 4,432 flats will be put on the resale market as they approach their five-year minimum occupation period.

Mr Mak estimates that for the whole of 2020, an additional 26,100 HDB flats will be eligible for resale, making it the highest number of flats in the past 14 years that will reach eligibility within the same year. 

“This new supply, coupled with the EHG and changes in the use of Central Provident Fund (CPF) for the purchase of older flats and other public housing subsidies, could sustain the price recovery and finally end the six-year decline of HDB resale prices,” he said.

The most expensive resale flat that changed hands last month was a high-floor five-room flat at Commonwealth Drive in Queenstown, which sold for $1.08 million. A premium maisonette unit in Choa Chu Kang Street 64 went for $900,000, the highest price in a non-mature estate.

Resale flat buyers last month underpaid according to what SRX estimates to be the market value for flats. The overall median transaction over X-value (TOX) was negative $1,000 last month.

TOX measures how  much a buyer is overpaying (positive value) or underpaying (negative value) for a property based on SRX's computer-generated market value. The data includes only districts with more than 10 resale transactions.

HDB executive flats recorded zero TOX while three-room, four-room and five-room recorded negative median TOX of $3,000, $1,000 and $1,000, respectively.

Flats in Sembawang recorded the highest median TOX at positive $11,000, while those in Ang Mo Kio and Jurong East recorded the lowest median TOX, at negative $11,000.