HDB resale prices up 0.2% in Q2

Prices of HDB resale flats had remained stable over the last two quarters.

HDB resale price index settled at 131.8 in Q2, an increase of 0.2% QoQ from 131.5 in the previous quarter, according to flash estimates from the Housing & Development Board (HDB).

Considering that the macroeconomy now is in completely unchartered waters and the strong headwinds facing Singapore's economy due to the pandemic, OrangeTee & Tie’s head of research & consultancy Christine Sun notes that prices of HDB resale flats had remained relatively stable over the last two quarters.

Meanwhile, the HDB resale volume plummeted significantly with only 789 resale flats transactions in April and May, compared to the 3,985 units sold over the same period last year, according to resale caveat data from Data.gov.sg.

Sun notes that the low resale volume is largely attributed to the pandemic and barring of house viewings during the circuit breaker period, as most buyers would prefer a physical inspection of the premises before making a purchase.

However, prices remained relatively firm despite the low sales volume, which indicates that there is little panic selling in the market during the pandemic. Sun adds that the market was probably sustained by the hefty stimulus package rolled out by the government in recent months and that owners may value their homes and may be more reluctant to sell their units at highly discounted prices.

“Moreover, other factors, such as the supply of BTO flats and number of flats reaching minimum occupation period (MOP), could have a greater impact on the HDB resale market and prices in the long run,” said Sun.

Huge price cuts are not expected as long as the economy does not deteriorate badly and the unemployment rate remains moderate. Sun expects the overall HDB resale price to trend between -2% and 1% this year.

In August, HDB will offer about 7,800 build-to-order (BTO) flats in Ang Mo Kio, Bishan, Choa Chu Kang, Geylang, Pasir Ris, Tampines, Tengah and Woodlands. In addition, around 5,700 flats in Bishan, Sembawang, Tampines, Tengah and Toa Payoh will be offered in November.