Fewer HDB resale flats sold in Q1, prices fall 0.3%

Resale prices of Housing Board flats fell by 0.3 per cent from the last quarter of 2018.
Resale prices of Housing Board flats fell by 0.3 per cent from the last quarter of 2018. ST FILE

SINGAPORE - Fewer Housing Board flats changed hands in the first three months of the year compared with the last quarter of 2018, falling 14.2 per cent to 4,835 cases.

Compared with the same period at the start of last year, however, the number of transactions was still 8.5 per cent higher, according to figures released by the Housing Board on Friday (April 26).

In line with flash estimates earlier this month, resale prices of Housing Board flats fell by 0.3 per cent on a quarterly basis - the third quarter in a row.

The lull for the first quarter was expected, given the festive period of the Chinese New Year, and observers expect resale volume to increase and prices to stay stable or increase slightly in the months ahead.

ERA Realty key executive officer Eugene Lim said he expects resale volume this year to increase by 5 per cent, from 23,099 flats last year to more than 24,000 for 2019.

PropNex Realty chief executive Ismail Gafoor said "demand will be invigorated" over the next nine months as the HDB is offering only 15,000 new flats this year, the lowest since 2015.

More resale flats may also be sold at higher prices, said OrangeTee & Tie research head Christine Sun, who noted that another 3,500 flats under the premium but now-defunct Design, Build and Sell Scheme, as well as almost 4,000 flats in popular mature estates like Bukit Merah, Queenstown and Ang Mo Kio, could go on the market this year.

Last year, 71 flats sold for $1 million and above, including four standard four-room units in Tiong Bahru.

"The higher price tags may have an uplifting effect on the overall price index," said Ms Sun, who also anticipates upcoming changes in May that may allow buyers to use more of their Central Provident Fund monies to buy older flats to "increase the attractiveness and spur demand for some older flats".

But prices are likely to remain stable overall, as a whopping 30,000 Housing Board flats will reach their minimum occupation period this year, and exert some downward pressure on prices.

Mr Lim estimated a conservative uptick of up to 1 per cent for the whole year: "While prices may be very stable now, and demand is likely to increase this year, buyers on the whole remain conservative due to factors like rising housing loan interest rates and concern over depleting leases."

As for the HDB rental market, the number of approved applications to rent out HDB flats rose by 2.6 per cent, from 11,479 cases in the fourth quarter of 2018 to 11,775 cases in the first three months of 2019.

Compared with the first three months of last year, the number of approved applications was 0.5 per cent higher.

As at March 31, there were 57,764 HDB flats that had been rented out - an increase of 1.8 per cent over the fourth quarter of 2018, at 56,742 units.

Ms Sun said she expects rental volume to pick up in the months ahead, as the peak rental season is usually in the second and third quarters of the year.

"The expansion of the two integrated resorts here will continue to enhance Singapore's vibrancy and tourism appeal globally," she said.

"The rental market is poised to benefit as more than 5,000 jobs may be created and around a third of these jobs are expected to be filled by non-locals."

Next month, HDB will offer about 3,400 Build-To-Order flats in Kallang, Whampoa, Tengah and Woodlands. There will also be a concurrent Sale of Balance Flats exercise.