HDB Resale prices rose for the ninth continuous month in March. This was due to a combination of delays in Build-to-Order (BTO) flats, rising private property prices and better market sentiments.
Resale prices grew by 0.8% during March compared to the month before based on information from SRX, a real estate portal.
Resale prices rose by 9.5% during March 2020 compared to the year before. This is nearing the all-time high, just 4.9% lower the peak in April 2013.
According to SRX data, the prices have been increasing at an average rate of 1% a month recently. If the prices continue at this rate, it may surpass the peak during the second half this year. This is assuming there are no new government cooling measures.
Head of Research and Consultancy at ERA, Nicholas Mak, said the rising prices are because of strong demand from home buyers who just want to get a flat and avoid the risk of BTO delays. The cash over valuation(COV) – Cash that buyers have to pay out over the difference between the HDB’s valuation and its higher actual sales price – has been rising in recent months.
The increase in COV may put off potential resale buyers, and this could slow down the resale price growth.
The most re-sold flats were four-room flats (43.3%). Five-Room flats came next at 25.5%, followed by three-room flats (22.9%) and executive flats (7%).
There are also 26,000 new HDB flats nearing the end of their fifth year minimum occupation period this year, after which they can be resold. These flats, if sold, would also affect the HDB resale prices.
The reasons that resale prices are on the upsurge might remain the rest of this year. The delay in the completion of new HDB flats was announced by the government on Wednesday. Around 85% (43,000) of BTO projects will be late by six to nine months
HDB monitors the price trends in the property market, and this may affect policies and HDB resale prices.
Overall, property experts expect demand for resale flats to stay healthy due to market sentiment and projected economic recovery for Singapore this year.