Prices of Housing Board (HDB) resale flats increased for the third consecutive month last month, with demand remaining elevated after the nearly two-month-long circuit breaker period.
HDB resale prices rose by 0.8 per cent last month 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 last month, a 2.2 per cent increase from August, flash estimates from real estate portal SRX showed yesterday.
Year on year, resale volume last month was 32.7 per cent higher than the previous year.
More than 2,400 units were sold last month for the fourth straight month, well above the two-year monthly average (between January 2018 and December last year) of 1,842 units sold before the Covid-19 outbreak.
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 last month, said OrangeTee & Tie head of research and consultancy Christine Sun.
"This indicates that overall demand in the HDB resale market is generally healthy this year despite the circuit breaker period, economic slowdown and Covid-19," she said.
Ms Sun added that the Hungry Ghost Festival failed to put a dent in housing demand this year as it had in previous years.
The demand may have been boosted by young couples who turned to HDB resale flats after becoming aware of the longer completion period of newly launched Build-To-Order projects, with a four to five year wait in some cases, she said.
"Some buyers are HDB upgraders who are turning to the HDB resale market due to price affordability."
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, with 2.7 per cent, followed by three-room and executive flats, up 2.5 per cent, and five-room flats, which rose 2.2 per cent.
Last month, the highest transacted price for a resale flat was $1.258 million for a five-room unit 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 $1.232 million for a five-room HDB flat in the same development.
ERA Realty head of research and consultancy Nicholas Mak said the rise in HDB resale prices was underpinned by the proportionally higher number of newer HDB flats - those with remaining leases of 90 years or more - transacted.
"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 remains upbeat about its outlook this year, in spite of the pandemic-led economic downturn."
