Resale volume for Housing Board flats rose for the second year in a row - by 7.8 per cent for the whole of 2016 - indicating buyers' eagerness to turn to the market as prices stabilise.
There were 20,813 transactions last year, up from 19,306 in 2015 and 17,318 in 2014 - a record low - according to a HDB statement yesterday.
This is despite the number of resale transactions falling 9.1 per cent to 5,012 cases in the last quarter of last year, compared with the previous three months' 5,514.
At the same time, resale prices last year stayed flat, falling slightly by 0.1 per cent from the year before.
The stability - resale prices have been on a gradual decline since 2013 - is likely to explain the higher transaction volumes, observers said.
ERA Realty key executive officer Eugene Lim said resale buyers are growing more keen as the risk is smaller. "Buyers are more confident of buying near the bottom of the market as prices have remained stable for one year."
It is a trend expected to continue, with analysts predicting resale volume will go up to 21,000 to 23,000 transactions this year. "Those with housing needs will continue to prop up the market as they cannot postpone their purchase indefinitely," said Mr Lim.
Similarly, PropNex chief executive Ismail Gafoor felt that "the current price points will entice more buyers to enter the market, as it is attractive enough for young couples and upgraders".
Even so, most observers do not expect a turnaround in prices just yet. R'ST Research director Ong Kah Seng said a price recovery this year is unlikely, given that existing cooling measures, like the mortgage service ratio that caps borrowing, are still in place.
At the same time, a large supply of flats will enter the market as HDB upgraders become "in dire need of disposing their existing flats", he said.
A "substantial" 17,000 Build-To-Order (BTO) units coming on the market next year would also pull some demand from the HDB resale market, "hence putting a lid over any possibility in price recovery", he added.
The first BTO exercise of the year will be launched next month, when the HDB will offer about 4,100 flats in Clementi, Punggol, Tampines and Woodlands.
But Mr Ismail is more optimistic on a price recovery. He expects HDB resale prices to be flat for the first six months of this year, before taking a positive turn in the second half. "We may end the year with a 1 per cent to 2 per cent price growth," he said.
The rental market also picked up last year. There were 52,941 HDB flats being sublet as at Dec 31, up from 50,264 in 2015 and 49,796 the year before.
As for rents, most analysts predict they will dip further this year. Mr Ong said this will be so, given an influx of HDB flats being put up for rent from upgraders who bought suburban condominiums from developers between 2010 and 2013, and are moving into their completed homes this year. The number of four- and five-room flats being sublet would be especially prominent as most upgraders tend to own flats of these sizes, he added.