Housing and Development Board (HDB) resale flat transactions fell by 3.2 per cent in Q3 2017, following a four-year high.
5,808 flats were transacted in Q3 2017, down from 6,001 in Q2 2017. Q3 2012 is the last quarter that saw more than 6,000 resale applications, where 6,560 resale applications were registered.
There were 5,808 cases in the third quarter, down from 6,001 in the second quarter. The last time transactions for a quarter crossed the 6,000 mark was in the third quarter of 2012, when 6,560 resale applications were registered.
The price of HDB resale prices are dropping, as the resale price index dropped 0.7 per cent in the third quarter this year compared to the previous quarter. This was also the biggest quarterly fall since 1Q 2015, where resale flat prices fell 1 per cent.
Resale flat prices have been on a gradual decline since 2013. This is due to the drop in prices of older HDB flats, especially those with less than 60 years lease in mature estates.
Owners of older HDB flats are looking to sell their homes and there are concerns that prices will continue to drop, especially after National Development Minister Lawrence Wong cautioned home buyers not to assume that all old HDB flats will be eligible for Selective En Bloc Redevelopment Scheme (SERs).
The dip in the resale price index is a surprise, given an increase in the resale grants given earlier in March this year. Any dip in the HDB resale market is short-lived, given the recent uptick in the private residential market.
The new offer of balance flats scheme has also resulted in shorter waiting time for Build-To-Order (BTO) flats. This could have reduced the demand from the resale market as well.
The increase in supply of public housing contributes to the dip in the resale price index of the property.
More public housing owners have also upgraded to executive condominiums and private properties, increasing the supply of resale flats. Moreover, the number of applications approved for subletting by HDB fell by 2.1 per cent, from 10,929 cases in the second quarter to 10,698 cases in the third quarter.
HDB is also going to offer 4,800 BTO flats in Geylang, Punggol, Sengkang and Tampines this month, bringing the supply of BTO flats to about 17,500. There will also be a concurrent sale of balance flats.
Adapted from: The Straits Times, 28 October 2017