HDB resale prices rise for 13th straight month in July, though growth pace slows

The most expensive HDB flat sold last month was a $1.225 million five-room unit at The Pinnacle @  Duxton.
The most expensive HDB flat sold last month was a $1.225 million five-room unit at The Pinnacle @  Duxton.PHOTO: ST FILE

SINGAPORE - Demand for Housing Board resale flats remained strong in July, with prices continuing to climb and more flats changing hands despite tightened Covid-19 measures in the second half of the month.

HDB resale prices rose for the 13th straight month, advancing 0.5 per cent in July compared with June, according to flash data from real estate portal SRX on Thursday (Aug 5).

However, the pace of price gains slowed for the second month, which could be an indication of price resistance from buyers, noted Huttons Asia senior director of research Lee Sze Teck.

Year on year, resale prices increased 13.2 per cent from July last year and are just 1.2 per cent off their peak in April 2013.

The rise in prices for resale flats last month was broad-based, climbing for both mature and non-mature estates, and almost all room types. Only prices for executive flats dipped, by 0.6 per cent.

A total of 2,662 resale flats changed hands last month, rising 15.2 per cent from the month before.

On July 22, Singapore returned to phase two (heightened alert) where group sizes were cut to two people, among other measures.

ERA Realty head of research and consultancy Nicholas Mak said that despite the viewing restrictions, the number of HDB resale flats sold in July still reached the highest level in the past four years.

"This showed that home buyers are getting accustomed to the pandemic and would not let social distancing measures stand in the way of buying their dream homes," he said.

The "relentless expansion" of HDB resale prices was driven by robust demand from home buyers who prefer the certainty afforded by resale flats, rather than risk further construction delays if they were to buy Build-To-Order (BTO) flats, added Mr Mak.

The recent reports of buyers paying cash over valuation (COV) in HDB resale transactions also propped up housing prices, he said.

COV is paid when a resale flat is sold above its actual HDB valuation; the difference can be paid for only in cash by the buyer.

Huttons' Mr Lee noted that the number of flats older than 45 years transacted last month was around 51 per cent higher than a year ago.

Additionally, about 75 per cent of the transactions last month - or 144 units - were three-room flats, he added.

"It could be empty nesters rightsizing to suit their retirement needs," said Mr Lee.

Last month also saw 19 resale flats change hands for at least $1 million, holding steady from the month before.

The most expensive HDB flat sold last month was a $1.225 million five-room unit at The Pinnacle @  Duxton.

The 19 million-dollar flats sold made up 0.7 per cent of last month's total resale transactions.

This brings the total number of such flats to 125 in the first seven months of this year, in what has already been a record year for million-dollar flats.

Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said "price bidding wars" have been observed by property agents for some popular flats as keen buyers make slightly higher offers to secure choice units.

"Some buyers may not mind paying slightly more to secure a unit now as they may feel that competition could continue to intensify given the limited housing stock," she said.

"Besides, they are not waiting further as prices of flats are not likely to fall in the near future since our economy is recovering," she added.