HDB resale flat prices rose by 0.1% q-o-q in 3Q2019, which saw 6,264 HDB resale transactions, down by 0.2% q-o-q from 6,276 resale transactions, according to the latest statistics by the government body.
According to Ismail Gafoor, CEO of PropNex Realty, “the HDB 3Q2019 resale volume is lower than expected and the dip in sales is likely due to the announcement on Sept 10 for the New Enhanced CPF Housing Grant. Buyers are weighing their options and opportunities before committing to purchase”. The new grants are likely to encourage more newlyweds to opt for resale flats instead of Build-To-Order flats, he says.
However, Christine Sun, head of research and consultancy at OrangeTee & Tie, says that resale demand has remained “surprisingly resilient” in 3Q2019. “Although sales volume is 11.3% lower than the 7,063 resale transactions inked in 3Q2018, 3Q2019 has the second-highest number of resale transactions for Q3 in seven years,” she adds.
Meanwhile, HDB resale prices have dropped by 0.4% over the first nine months of this year. Prices could stabilise this quarter and the overall price change for 2019 could range from minus-1% to 0%, says Sun.
This is in line with the long-standing trend since 2012, where HDB resale price growth has been in the negative range. This trend is expected to continue for the rest of the year, but an increase in demand for resale flats as a result of the new grants may see positive price growth of 1% to 2% in 2020, says Gafoor.
Next year, an estimated 26,000 new HDB flats will reach their five-year Minimum Occupancy Period (MOP) which means they can be sold in the resale market. The number is about 50% higher than the five-year average of 17,400 flats that reach MOP each year, says Nicholas Mak, head of research and consultancy at ERA Realty. The injection of new supply is also expected to add to the upward momentum of resale HDB prices, he adds.
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