The Housing Board resale market roared to life in the third quarter amid a recession triggered by the Covid-19 pandemic, with transactions surging to a 10-year high and prices growing at the fastest clip in the past eight years.
In the private market, prices continued to surprise on the upside, driven by landed homes and a burst of buying in the city fringes and the suburbs after the two-month circuit breaker to stem the spread of Covid-19 ended on June 1.
Data released yesterday showed the Urban Redevelopment Authority's (URA) private home price index rose 0.8 per cent in the third quarter from the previous three months, unchanged from its flash estimate.
Despite the economic downturn, the private residential market received a boost from fiscal stimulus including job support schemes, record low interest rates, and a buoyant public housing market that enabled upgraders to afford new private homes, noted Ms Tricia Song, head of research for Singapore at Colliers International.
Prices of resale HDB flats rose 1.5 per cent quarter on quarter after edging up 0.3 per cent in the second quarter. This is the fastest rate of growth in the past eight years since prices rose 2.5 per cent in the fourth quarter of 2012, said ERA Realty's head of research and consultancy Nicholas Mak.
Year on year, prices rose 2.3 per cent. They are up 1.8 per cent for the first nine months of this year.
The HDB resale volume is also the highest in 10 years, since 8,205 flats were sold in the third quarter of 2010. There were 7,787 resale flats transacted in the July to September quarter this year, a 127.3 per cent surge from 3,426 units in the second quarter, when sales fell 40 per cent quarter on quarter owing to the circuit breaker.
Orange Tee & Tie head of research and consultancy Christine Sun said some demand came from buyers switching to resales as many Build-To-Order (BTO) launches were heavily oversubscribed.
The HDB said around 9,300 BTO flats will be offered next month and next February.
Meanwhile, in the private non-landed market, prices edged up 0.1 per cent in the third quarter, following a 0.4 per cent rise in the second quarter. This came as both developer sales and secondary sales rebounded strongly post-circuit breaker.
In the first nine months of this year, developers managed to sell 7,379 new homes, slightly below the 7,469 units sold during the same period a year earlier, noted Mr Ong Teck Hui, senior director of research and consultancy at JLL.
Private resale volumes hit a two-year high of 3,530 units sold in the third quarter, compared with 951 units in the second quarter, he said.
But Ms Song warned that pent-up demand is starting to fizzle. This is especially after the URA clamped down on some developers' practice of reissuing options to purchase to the same buyer multiple times.
Based on the caveats as at Thursday, 299 new private homes (excluding executive condominiums, or ECs) were sold in the first 13 days of this month, compared with 1,329 private home sales in the whole of last month, she pointed out.
In the third quarter, developers sold 3,517 units (excluding ECs), up 105 per cent from the 1,713 units taken up in the second quarter. They launched 3,791 units (excluding ECs), compared with 1,852 units in the previous quarter.
In the first nine months of the year, Singaporeans accounted for some 80 per cent of new homes sold - the highest proportion since 2010, said Mr Ismail Gafoor, chief executive of PropNex, citing Realis data.
Foreigners bought 225 units in the third quarter, up from 119 in the second quarter despite travel restrictions, due in part to more foreign firms setting up operations in Singapore, said Mr Lee Sze Teck, director of research at Huttons Asia.
The URA said prices of non-landed properties in the prime or core central region fell 3.8 per cent in the third quarter, compared with a 2.7 per cent rise in the previous quarter.
Prices of non-landed properties in the city fringe or rest of central region jumped 2.5 per cent, compared with a 1.7 per cent fall in the previous quarter.
Prices in the suburbs or outside central region jumped 1.7 per cent, compared with a 0.1 per cent gain in the previous quarter.
Demand remains strong in city fringe and suburban projects at the sweet spot of $1 million to $1.5 million per unit, Ms Song said.
The URA also said prices of landed properties jumped 3.7 per cent in the third quarter, after remaining unchanged in the second quarter.
Unlike prices, rents of private residential properties continued to weaken in the third quarter. Rents of non-landed properties dipped 0.6 per cent in the third quarter, easing from a drop of 1.1 per cent in the previous quarter due to the pandemic and rising unemployment among foreign workers, analysts say.
Developers did not launch any EC units for sale in the third quarter, and sold 164 EC units in the quarter. In comparison, they sold 71 EC units in the previous quarter.
As at the end of the third quarter, there was a total supply of 50,369 uncompleted private residential units (excluding ECs) in the pipeline with planning approvals, compared with 49,090 units in the previous quarter.
Of this number, 26,483 units remained unsold as at the end of the third quarter, compared with the 27,977 units in the previous quarter.