SINGAPORE - Prices of Housing Board resale flats increased for the third consecutive month in September, with demand remaining elevated after the nearly two-month-long circuit breaker period.
HDB resale prices rose by 0.8 per cent in September compared with August, a faster rate than the previous two months, and were 3.1 per cent higher year on year.
However, they were still 11.4 per cent lower than their peak in April 2013.
In all, 2,489 HDB resale flats changed hands in September, a 2.2 per cent increase from August, flash estimates from real estate portal SRX showed on Thursday (Oct 8).
Year on year, resale volume in September is 32.7 per cent higher than the previous year.
September is also the fourth straight month that monthly sales exceeded 2,400 units and is above the two-year monthly average (between January 2018 and December 2019) of 1,842 units sold before the Covid-19 pandemic.
The HDB resale market has chalked up the strongest quarterly sales since the third quarter of 2016, with 7,394 units sold from July to September, said OrangeTee & Tie head of research and consultancy Christine Sun.
"This indicates that the overall demand for the HDB resale market is generally healthy this year despite the circuit breaker period, economic slowdown and Covid-19", she said. She added that the Hungry Ghost Festival failed to put a dent in housing demand this year as it did in previous years.
The demand may have been boosted by young couples who turned to HDB resale flats after seeing the longer completion period of newly launched Build-To-Order projects, where some have a four to five years' wait, said Ms Sun.
"Some buyers are HDB upgraders who are turning to the HDB resale market due to the price affordability," she added.
Prices have also increased across the board for all HDB resale flat types compared with a year ago.
Four-room flats saw the biggest price increase of 2.7 per cent, followed by three-room and executive flats by 2.5 per cent, and five-room flats by 2.2 per cent.
In September, the highest transacted price for a resale flat was $1.26 million for a five-room flat at The Pinnacle @ Duxton in Tanjong Pagar. It was one of eight HDB resale flats that sold for at least $1 million that month.
Ms Sun noted that this appears to be a "historical high" as the highest transacted price before this was $1.23 million for a five-room HDB flat in Cantonment Road.
ERA Realty head of research and consultancy Nicholas Mak said rising HDB resale prices were underpinned by the proportionally higher number of newer HDB flats transacted. Newer HDB flats are those with remaining leases of 90 years or more, including those that recently completed the five-year minimum occupation period.
"These newer flats would usually command higher prices than the older flats in the vicinity, which would contribute to the increase in the price index," said Mr Mak.
Ms Wong Siew Ying, head of research and content at PropNex, said: "Feedback from our real estate agents suggests that there is stiff competition for HDB resale units in the market, so pricing should continue to find support in the months ahead. We believe the HDB resale market has turned a corner and remain upbeat about its outlook this year, in spite of the pandemic-led economic downturn."
Mr Mak estimated that around 22,500 to 23,500 HDB resale flats could change hands this year, which is about the average annual resale volume from 2017 to 2019.
SRX's latest report also showed that its overall median transaction over X-value (TOX) was a positive $2,000 for HDB resale transactions in September, a drop of $1,000 compared with August.
Median TOX measures whether people are overpaying (in the case of positive TOX) or underpaying (when there is negative TOX) relative to SRX's computer-generated estimated market value for flats.
Flats in Bukit Batok posted the highest median TOX of positive $6,500, while those in Bishan saw the lowest of negative $7,000.
