HDB resale transaction volume plunges by 41.9% q-o-q in 2Q2020

SINGAPORE (EDGEPROP) - HDB resale transactions have fallen by 41.9% q-o-q in 2Q2020 to 3,426 units from 5,893 units in 1Q2020, according to public housing data released by the HDB.

On a y-o-y basis, resale volume plummeted by 45.4% from 6,276 units transacted in 2Q2019.

Despite the fall in sales volume, HDB resale prices remained resilient, rising 0.3% in 2Q2020. This also marked the fourth straight quarter that HDB resale prices have stayed out of negative territory, following six years of decline from 2013 to 2018, notes Propnex.

Prices of HDB resale flats have fluctuated more dramatically in past crises, says Christine Sun, head of research & consultancy at OrangeTee & Tie. The HDB resale price index plunged nine successive quarters during the Asian Financial Crisis, by 28.1% from 4Q1996 to 1Q1999. Around the September 11 terrorist attacks, prices declined by eight consecutive quarters from 1Q2000 to 1Q2002. Over the 2008 Global Financial Crisis, HDB prices declined by 0.8% in 2Q2009.

Meanwhile, the number of approved applications to rent out HDB flats fell by 9.1% to 10,539 units in 2Q2020 from 11,591 units in 1Q2020.

However, there has been more rental renewals in the past months as many foreign workers were not able to return to their home countries or travel to another country for the next work assignment, says Sun. “Some employers had also arranged alternate housing for workers who were affected by the border lockdown and unable to commute daily from Malaysia,” she adds.

Compared to other segments of the property industry, property consultants are more bullish on the public housing market, forecasting that HDB resale volume is likely to recover in the near term.

Sun expects that the total resale transaction for the year could hit 18,000 to 20,000 units, still lower than last year’s total resale volume.

A supply overhang is also expected, with many HDB flats reaching their five-year Minimum Occupation Period that could contribute to a downward pressure on prices, she says.