SINGAPORE - The Housing Board resale market remained steadily robust in the first quarter of this year amid Covid-19 vaccine optimism, with prices of resale flats rising for the fourth consecutive quarter even as fewer flats changed hands.
The resale price index for the first three months of the year was logged at 142.2, an increase of 3 per cent over that in the fourth quarter of 2020, according to figures released by HDB on Friday (April 23).
Prices rose 8.1 per cent year on year.
Last quarter's HDB resale prices were just 4.8 per cent lower than their peak in the second quarter of 2013, said Ms Christine Sun, OrangeTee & Tie's senior vice-president of research and analytics.
At the current pace of price growth and increased demand, prices may reach the 2013 peak in the second half of this year, she added.
She noted that the roll-out of Covid-19 vaccines around the world and anticipated global economic recovery stoked a frenzy of property-buying activity worldwide, which in turn lifted market sentiment for the HDB resale market.
The supply and demand imbalance of flats has also caused prices of HDB resale flats to climb in many locations, said Ms Sun.
Prices for resale flats rose in 22 of the 26 HDB towns, with those in the central area clocking the highest median resale price at $910,000 for a four-room flat.
These include popular projects such as The Pinnacle @ Duxton in Cantonment Road, where a handful of five-room flats on high floors have sold for more than $1 million in recent years.
Woodlands clocked the lowest median resale price at $380,000 for a four-room flat, while Sembawang followed closely at $399,000.
Demand for HDB resale flats started gaining traction in the second half of last year, after Singapore came out of a two-month-long circuit breaker period to curb the spread of the Covid-19, with resale prices steadily inching up in recent months.
However, overall resale volume dipped slightly last quarter on the back of higher resale prices and rising cash over valuation (COV).
The number of transactions fell 0.8 per cent from 7,642 units in the fourth quarter of 2020 to 7,581 units in the first quarter of this year.
Compared with the first quarter of last year when 5,893 units changed hands, resale volume rose 28.6 per cent.
Ms Sun said: "Last quarter, many flats were sold with COV. Multiple offers and price bidding wars for choice flats were common as buyers were willing to shell out extra for premium flats, as they believe that supply of these flats are limited especially for newer resale flats in mature estates."
PropNex head of research and content Wong Siew Ying said the pace of price growth may start to moderate as price resistance sets in.
She expects HDB resale prices to grow by 6 to 7 per cent this year.
Similarly, Huttons Asia director of research Lee Sze Teck predicts a price gain of up to 8 per cent for this year.
Demand for rental HDB flats also rose last quarter despite rising rents, as many foreigners choose to stay put and renew their leases because of border restrictions.
The number of approved applications to rent out HDB flats rose by 26 per cent, from 8,472 cases in the fourth quarter of last year to 10,676 cases in the first quarter of this year.
As for Build-To-Order (BTO) flats, HDB will offer about 3,800 such flats in Bukit Merah, Geylang, Tengah and Woodlands next month.
In August, it will launch another 4,900 BTO flats in Hougang, Jurong East, Kallang/Whampoa, Queenstown and Tampines.
HDB said it will calibrate the supply if required, given the economic uncertainty due to Covid-19.
Ms Sun said the completion period for BTO projects in the two upcoming exercises is likely to remain long, as there is a backlog of projects facing construction delays caused by the pandemic.
Current waiting time for a new BTO flat ranges from three years to five years, based on the timeline released in the previous two BTO exercises.
"The situation could be exacerbated as further construction delays may be expected as a result of new quarantine orders arising from the recent resurgence of Covid-19 cases in certain dormitories," said Ms Sun.