Following a four-year high, Housing Board resale flat transactions fell by 3.2 per cent in the third quarter over the previous quarter, HDB said yesterday.
There were 5,808 cases in the third quarter, down from 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.
Resale flat transactions in the third quarter rose by 5.3 per cent compared with the same period last year.
According to HDB data, resale flat prices continued falling, with the resale price index dropping 0.7 per cent in the third quarter this year over the previous quarter.
The third-quarter decline is also the biggest quarterly fall since the first quarter of 2015, when resale flat prices fell 1 per cent.
Resale flat prices have been on a gradual decline since 2013.
Dr Lee Nai Jia, head of research at Edmund Tie & Company, said the fall in resale flat prices was due to the drop in prices of older HDB flats, especially those with less than a 60-year lease in mature estates.
"Many of the owners in these older HDB flats are seeking to sell their homes, as there are concerns that value will continue to depreciate, especially after National Development Minister Lawrence Wong cautioned home buyers not to assume that old HDB flats will be automatically eligible for the Selective En Bloc Redevelopment Scheme," said Dr Lee, adding that interest in such older homes has dipped too.
Mr Eugene Lim, key executive officer of ERA Realty Network, said the dip in the resale price index comes as a surprise, "given that HDB announced enhancements to its resale grants earlier in March this year".
However, he expected any dip in the HDB resale market to be short-lived, given the "recent exuberance in the private residential market".
He added that there may be more demand in four to six months, with some owners of private collective sale units, especially retirees, buying resale flats as "replacement units".
Of the fall in resale transactions, Mr Lim said the new Re-Offer of Balance Flats scheme and shorter waiting time for Build-To-Order (BTO) flats could have diverted demand from the resale market, as HDB is offering new and cheaper flats with a shorter waiting time.
Mr Ismail Gafoor, chief executive of PropNex Realty, said the increase in supply of public housing is likely the driving force for the dip in the resale price index.
He added that more public housing owners are upgrading to executive condominiums and private properties, further increasing the supply of resale flats.
The number of applications approved for the subletting of HDB flats fell by 2.1 per cent, from 10,929 cases in the second quarter to 10,698 cases in the third quarter.
HDB will also offer about 4,800 BTO flats in Geylang, Punggol, Sengkang and Tampines next month.
This will bring the total BTO flat supply for the year to about 17,500 units. There will be a concurrent sale of balance flats exercise as well.