SINGAPORE – The number of Housing Board (HDB) resale flats that changed hands in the second quarter of 2019 grew nearly 30 per cent as compared with the first three months of the year, latest public housing figures show.
There were 6,276 resale transactions in the second quarter of the year, up 29.8 per cent from the 4,835 cases in the first quarter, according to the HDB, which released the data on Friday (July 26).
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 this was the first increase in sales volume since July last year when cooling measures were implemented, and described it as giving the HDB resale market a “new lease of life”.
The changes allow 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 sees an uptick in sales activity and more units changing hands, resale transactions have 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 spurring the buying 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 have been an increase in sales inquiries and a 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 that she has also observed more en bloc owners buying older flats after collecting their sales proceeds.
“Some may regard older flats as affordable given their low price quantum and large living spaces, and they get to keep a sizeable balance amount of their sales proceeds for retirement or reinvestment,” she added.
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 said that HDB resale prices have declined at a marginally slower pace of 0.2 per cent in the latest quarter, as compared to the 0.3 per cent dip in the previous quarter, due to the improving sentiment and 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.
She added 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.
The number of approved applications to rent out HDB flats was 2.6 per cent higher in the second quarter of this year, compared with the same quarter in the previous year.
As at June 30, there were 58,528 flats being rented out, an increase of 1.3 per cent over the 57,764 in the first quarter of this year.
The highest median rent recorded was for five-roomers in Queenstown, at $2,800.
This was followed closely by five-room units in Bukit Merah at $2,730, and four-room flats in the central at $2,700.
Ms Sun noted that the increase in rental applications was within expectation as the second quarter of the year is usually a peak rental season. More flats are also now eligible to be leased after reaching their five-year minimum occupancy period.
HDB also said on Friday that it will be offering about 3,300 Build-To-Order flats in Punggol and Tampines in August, as well as about 4,500 BTO flats in Ang Mo Kio, Tampines and Tengah in November.
There will also be concurrent Re-Offer of Balance Flats (ROF) and Sale of Balance Flats exercises in August and November.
ROF flats that have not been selected remain available for open booking by eligible home buyers throughout the year.
More details are available on the HDB InfoWEB.