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Singapore: HDB resale prices climb 2.8% in Q2, transaction volumes fall
THE second quarter of 2022 saw a continued rise in Housing Board (HDB) resale prices compared to Q1, according to figures released by HDB on Friday (Jul 22).
The resale price index for Q2 was logged at 163.9, 2.8 per cent higher than that in the previous quarter.
Tan Tee Khoon, country manager for PropertyGuru Singapore, attributes the rising prices to build-to-order (BTO) flat construction delays which continue to push young families toward the HDB resale market.
“Despite the highly desirable city fringe location near MRT stations, the flats with a 60-month build time were shunned in favour of the Yishun project, which came at a lower price point and quicker 39-month build time,” he noted.
Tan believes prices of HDB resale flats were further propped up by a preference for larger HDB flat types, with upgraders going for larger resale flats in the city-fringe neighbourhoods.
Resale transactions fell by 1.7 per cent to 6,819 cases from 6,934 the previous quarter, marking the third consecutive quarter of decline. Year on year, transactions were 3.5 per cent lower.
The latest transaction figure marks the lowest quarterly sales since the circuit breaker in Q2 of 2020, according to Huttons. The agency thinks this “points to signs of the market losing momentum” as transaction activities normally tend to pick up in Q2.
It expects HDB resale prices to increase up to 10 per cent for the full year of 2022.
With million-dollar flats making up more than 1 per cent of total resale flat transactions, both Huttons and PropertyGuru are anticipating more of such deals for the rest of the year. Huttons projects million-dollar flat resale transactions to possibly exceed 300 for 2022.
A 5-room HDB flat City Vue @ Henderson notably sold for S$1.39 million over Q2, although PropertyGuru’s Tan pointed out this was “eclipsed” by another 5-room flat at SkyTerrace @ Dawson that sold for about S$1.42 million in July. He also highlighted an emerging trend of buyers willing to pay cash over valuation for 5-room and bigger flats – as evident in the first Woodlands, Marine Parade and Pasir Ris million-dollar flats having transacted over the past quarter.
Among the latest data provided by HDB, 5-room flats in Queenstown registered the highest median resale price of S$875,000 in the second quarter, as well as the highest median rent at S$3,200.
The number of approved applications to rent out HDB flats fell by 8.6 per cent to 9,309 cases compared to 10,189 cases in Q1 of 2022. This was 15.2 per cent lower than the number of approved applications in the same quarter the previous year.
As at the end of Q2, there were 56,014 flats rented out – down 0.6 per cent from 56,340 units the previous quarter.
In August, HDB will offer about 4,900 BTO flats spread across Ang Mo Kio, Bukit Merah, Choa Chu Kang, Jurong East, Tampines and Woodlands. A further 9,500 BTO flats will be offered in November in Bukit Batok, Kallang Whampoa, Queenstown and Yishun.
The board said it is on track to launch up to 23,000 new flats in 2022.
Lee Sze Teck, senior director of research for Huttons, foresees HDB resale prices trending towards more stability in H2 of the year, as rising interest rates and more affordable BTO flats with a shorter construction period will divert some demand away from the resale market.
“Buyers of a BTO flat will enjoy deferred payment till key collection, which will allow buyers to tide over the current high interest rate environment,” added Lee.
Source: https://www.businesstimes.com.sg/real-estate/hdb-resale-prices-climb-28-in-q2-transaction-volumes-fall