HDB resale prices rose 3% q-o-q in 1Q2021, increasing for fourth straight quarter

SINGAPORE (EDGEPROP) - Prices of HDB resale flats rose by 3% q-o-q in 1Q2021, marking its fourth consecutive quarter of increase, according to HDB data.

The prices for resale flats are now inching closer to the peak price recorded in 2Q2013, says Christine Sun, senior vice-president of research & analytics at OrangeTee & Tie. On a y-o-y basis, prices for HDB resale flats rose by 8.1%.

In 1Q2021, “multiple offers and price bidding wars for choice flats were common as buyers were willing to shell out extra for premium flats as they believe that supply of these flats are limited especially for newer resale flats in mature estates”, adds Sun.

The increase in HDB resale prices was largely led by the price growth of flats in mature estates. While the median transacted price of resale flats in mature estates grew 4.2% q-o-q to $500,000, the median price of flats in non-mature estates only increased 2.3% q-o-q to $450,000, observes ERA Research & Consultancy.

Across different flat types, resale 5-room HDB flats enjoyed the highest quarterly price growth in 1Q12021. In the first quarter of this year, the median transacted price of 5-room flats islandwide increased 4.2% q-o-q to $545,000, notes ERA.

“As more people work from home more often due to the Covid-19 pandemic, some might want a more spacious living environment that could easily be converted into work space if needed. Hence, there was more demand for bigger resale flats,” it adds.

In the rental market, rental volume across HDBs jumped 26% from 8,472 leasing transactions in 4Q2020 to 10,676 leasing transactions in 1Q2021. ERA attributes the increase in leasing demand to young families renting HDB flats while waiting for the completion of their new BTO flats and more foreign talents and international students returning to Singapore.

Sun adds: “Many tenants have renewed their leases, resulting in high occupancy rates and fewer units being put up for lease. Although borders have been gradually reopened, many Malaysians working in Singapore have renewed their leases as they found difficulty travelling across the causeway on a daily basis.”

Looking ahead, consultants expect the HDB resale market to remain buoyant. “Supply of Build-to-Order (BTO) flats in the upcoming project launches will continue to be limited and the number of unsuccessful BTO flat applicants will remain high especially for popular sites or mature estates. Unsuccessful BTO flat applicants may turn to the HDB resale market to satisfy their housing needs,” explains Sun.

With more flats reaching the end of their MOP period, the rise in the number of newly eligible resale HDB flats would further increase the resale transaction volume, says ERA. In 2021 and 2022, an additional 26,000 flats and 35,300 flats would reach the end of their five-year MOP respectively. which is much higher than the annual average of 12,600 flats in the previous 5 years from 2014 to 2018, it says.