With many buyers flocking back to the market following the end of the circuit breaker, resale volume surged 127.3% to 7,787 units in Q3 2020 from 3,426 units in Q2 2020, making Q3 2020 the strongest quarter sales since Q3 2010 when 8,205 units were shifted.
Singapore’s public housing market registered a stunning rebound in the third quarter of 2020, with HDB resale prices increasing 1.5% quarter-on-quarter (q-o-q) following a marginal increase of 0.3% in the previous quarter, showed Housing and Development Board (HDB) data.
On an annual basis, HDB resale prices rose 2.3%.
Christine Sun, Head of Research and Consultancy at OrangeTee and Tie, attributed the increase to many newer HDB resale flats entering the market in Q3.
“As newer flats tend to command higher prices than older ones, the overall price index could have been ‘uplifted’ by the newer flats,” she said.
She added that some sellers may have raised their asking price as housing demand has returned and in light of the increasing demand for HDB flats.
With many buyers flocking back to the market following the end of the circuit breaker, resale volume surged 127.3% to 7,787 units in Q3 2020 from 3,426 units in Q2 2020.
On an annual basis, resale volume rose 24.3% from Q3 2019’s 6,264 units, making Q3 2020 the strongest quarter sales since Q3 2010 when 8,205 units were shifted.
“The stellar sales indicate that demand is considered healthy in spite of the pandemic,” said Sun.
She believes that some demand may have been drawn from the Build-To-Order (BTO) market.
“Many BTO flats from recent launches were slated to be completed in four to five years’ time and the long waiting period drove some buyers to the resale market especially for couples with urgent accommodation needs. Many BTO launches were also heavily oversubscribed and unsuccessful candidates had to turn to the resale market as an alternative,” explained Sun.
Meanwhile in the HDB rental market, HDB revealed that the approved applications to rent out HDB flats fell 22.2% q-o-q and 31.7% year-on-year to 8,196 units in Q3 2020.
Sun noted that the strong housing needs coming from some non-construction companies and Malaysian workers returning to work in the city-state, after the reopening of the border in August, helped mitigate the steep drop in leasing demand due to the reduced inflow of foreign workers in some economic sectors.
Looking ahead, OrangeTee is cautiously optimistic that about 20,000 to 23,000 resale flats may be transacted this year, with prices trending between 1.5% and 3.5% for the whole of 2020.
“The dawn of a market recovery may not have arrived yet as a confluence of economic challenges remain – the risk of a global economic slowdown, a grim employment outlook and the adverse impact of the withdrawals of government support measures for businesses,” said Sun.
“Nevertheless, tailwinds from low-interest rates may prop up sales and sustain prices in the near term.”
“Barring any unforeseen circumstances, the next Sale of Balance Flats (SBF) exercise is also scheduled to be launched in November 2020, together with the BTO exercise,” it said.