Resale HDB transactions in 2018 hit new high in six years

By EdgeProp | January 26, 2019 6:16 PM SGT
The Pinaccle @ Duxton
Resale HDB numbers hit 23,099 transactions for the whole of 2018 – a new high since 2012, highlights Orange Tee & Tie. This is an increase of 4.6% compared to 2017, when 22,077 resale flats changed hands. “The increasing sales volume is a silver lining in the HDB resales market, where demand continued to be resilient in many areas,” the firm says.
Meanwhile, HDB resale transactions were 5,637 in 4Q2018, a 20.2% q-o-q drop. Prices of HDB resale flats declined by 0.2% in that period, and recorded an overall decline of 0.9% for the whole of 2018, which shows “signs of resiliency as compared to 2017”, says Propnex. The fall in prices has been “less pronounced” when compared to 2017.
OrangeTee & Tie attributes this to more transactions being done as newer HDB flats reach their Minimum Occupation Period (MOP) in non-mature estates that are able to fetch “good” prices. This year, 26,000 HDB flats are expected to reach their MOP. “We may see more resale activities in towns like Punggol, Sengkang, Yishun, Bukit Merah, Pasir Ris and Tampines as many flats will be put up in the resale market once they reach their five-year MOP,” it adds.
Propnex executive chairman and CEO Ismail Gafoor estimates 23,000 to 24,000 homes to be sold in 2019. The overall HDB resale price index will experience a 1% growth this year, he says.
Meanwhile, ERA attributes the trend of HDB resale flats fetching over $1 million to four reasons.
First, HDB flats are the most affordable type of housing in Singapore – “those [who] are priced out of the private property market or are ineligible for new Build-to-Order (BTO) flats will buy resale,” it says.
Second, resale flats are the “only way” for buyers to pick a flat in their location of choice.
Third, there is no income ceiling for those buying resale flats if the buyer does not take grants or a HDB loan.
Fourth, there could be additional demand from the owners of collective sales who could have chosen resale HDB flats as compared to a similar-sized private unit.
However, these high-priced transactions remain the exception rather than the norm. The “majority of resale HDB flats that have been transacted are supported by valuation [which] points to a very stable public housing market”, says ERA.