HDB resale prices remained flat in Q1

There have been a few major price fluctuations, even as volumes continue to fall.

HDB resale price index (RPI) remained unchanged in Q1 at 131.5 as compared to Q4 2019, according to data from the Housing Development Board (HDB).

“Prices of HDB resale flats have been rather stable as major price fluctuations were few and far between in recent years. Over the past 20 quarters, the QoQ price changes had been within a narrow band of between -1 and 1%,” said Christine Sun, head of research & consultancy at OrangTee & Tie.

Resale transactions fell by 7% QoQ to 5,893 deals in Q1 from 6,339 in Q4 2019. On a YoY basis, resale transactions jumped 21.9% YoY from Q1 2019. Sun noted that the quarterly decline indicates that the pandemic and circuit breaker measures may have some impact on the HDB resale market.

“House viewings were discontinued as part of the containment measures and buying sentiment may have weakened in light of the current macroeconomic uncertainties,” she added.

The number of approved applications to rent out HDB flats fell by 4% QoQ, from 12,079 cases in Q4 2019 to 11,591 cases in Q1. This figure is 1.6% YoY lower. As at end-Q1, 57,652 HDB flats were rented out, an increase of 0.7% QoQ from 57,224 units.

“The drop in applications could be attributed to fewer owners desiring to lease out their units in the face of the current pandemic. Some could be staying in their own flats in light of the Circuit Breaker Measures, while others may choose to lease their flats only after the pandemic subsides so as to avoid a potential virus spread in their units,” Sun commented.

Overall, she’s expecting the number of resale transactions to be slightly lower in 2020 compared to 2019 at around 21,000 to 22,000 units sold. Prices of resale flats may enter the negative territory, but property values are likely to hold steady for areas of higher demand.