Sales of HDB resale flats up nearly 30% in Q2 but prices dip

There were 6,276 HDB resale transactions in the second quarter, up 29.8 per cent from the 4,835 in the first quarter. The figure was also 5.6 per cent higher than the resale transactions in the second quarter of last year.
There were 6,276 HDB resale transactions in the second quarter, up 29.8 per cent from the 4,835 in the first quarter. The figure was also 5.6 per cent higher than the resale transactions in the second quarter of last year.ST FILE PHOTO

The number of Housing Board resale flats that changed hands in the second quarter of this year rose nearly 30 per cent when compared with the first three months of the year, latest public housing figures show.

There were 6,276 resale transactions in the second quarter, up 29.8 per cent from the 4,835 in the first quarter, the HDB data showed yesterday. This year's figure was also 5.6 per cent higher than the resale transactions in the second quarter of last year.

Ms Christine Sun, head of research and consultancy at OrangeTee & Tie, said the figure represented the first increase in sales volume since July last year when cooling measures were implemented. She described it as a "new lease of life" for the HDB resale market.

In addition, new changes now give property buyers greater flexibility in using their Central Provident Fund (CPF) and also to get bigger housing loans for their property purchases, as long as the property's remaining lease covers the youngest buyer till the age of 95.

Ms Sun added that while the second quarter usually witnessed an uptick in sales activity and more units changing hands, resale transactions had also spiked on a year-on-year basis, indicating that apart from a seasonal effect, the recent CPF changes may have been a major catalyst in spurring demand.

She said: "The policy changes may revive demand for older flats in the coming months. Many owners of older flats have been struggling to find a suitable buyer since the start of the lease-decay debate."

She added that there had been an increase in sale inquiries and greater buying interest for older flats in recent times.

"Some potential buyers who desire to live near their parents in mature estates may now be able to obtain a housing loan or to fully utilise their CPF to buy an older flat in the vicinity under the new regulation," she said, adding that the changes would allow the age of the buyer to be taken into consideration with the balance lease of the flat.

These buyers could have faced loan restrictions in the past as the ability to obtain a loan was dependent on the age of the flat.

Ms Sun said more people were also buying older flats after they received the proceeds from the collective sale of their homes.

HDB data showed that the prices of resale flats dipped 0.2 per cent from the previous three months, making for the fourth straight quarter of decline.

Five-room flats in Toa Payoh fetched the highest median resale price at $839,000, followed by those in Queenstown at $815,000 and Bukit Merah at $780,000.

Ms Sun saw a bright spot on the resale price front though, saying that they had declined at a marginally slower pace compared with the 0.3 per cent dip in the previous quarter. She attributed this to improving sentiment and the revival of buying interest for older flats.

"While this is a fourth consecutive quarterly decline, prices have dipped less than 1 per cent over the past year, indicating that the price decline has largely stabilised," she said, adding that while sales volume may continue to trend upwards in the coming months, a price recovery may not be as quick given the increasing supply of HDB resale flats and possibly more sellers vying for buyers.

Instead, the prices of flats may continue to face downward pressure for some locations, she said.

Latest figures also showed that HDB approved 4.8 per cent more applications to rent out flats in the second quarter of the year. It approved 12,335 applications, up from the 11,775 in the first quarter of the year.

A version of this article appeared in the print edition of The Straits Times on July 27, 2019, with the headline 'Sales of HDB resale flats up nearly 30% in Q2 but prices dip'. Print Edition | Subscribe