HDB flats in Bukit Panjang

HDB flash estimates showed that the resale price index increased by 0.2% in Q2 2020, after staying flat in Q1 2020.

Whilst the COVID-19 pandemic has affected property prices in the private market, resale prices of HDB flats remained relatively stable in the last two quarters.

HDB flash estimates showed that the resale price index increased by 0.2% in Q2 2020, after staying flat in Q1 2020.

“We would caution against reading too much into the prices as transaction volume in Q2 2020 is expected to be 75% lower than Q1 2020. Such low volume may not be representative of the entire market,” said Lee Sze Teck, Director of Research at Huttons Asia.

Based on resale caveat data from Data.gov.sg, 789 resale flats were transacted in April and May, which is way lower compared to the units sold over the same period between 2017 and 2019.

OrangeTee & Tie said the low resale volume is largely attributed to the COVID-19 pandemic and barring of house viewings during the circuit breaker period.

“Physical house viewings are important for the resale market as most buyers would prefer a physical inspection of the premises before making a purchase. They may want to examine the condition of the units and assess the surrounding environment. As physical house viewings cannot be conducted, resale demand had ‘naturally’ declined last quarter,” said Christine Sun, Head of Research and Consultancy at OrangeTee & Tie.

She noted that the relatively firm prices indicates that there is little panic selling within the market during the pandemic. This comes as the market was probably sustained by the government’s hefty stimulus package.

“Many owners may also view their properties differently after the Circuit Breaker period. They may value their homes more especially given the proliferation of the work-from-home concept 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 MOP (Minimum Occupation Period), could have a greater impact on the HDB resale market and prices in the long run,” she said.

With this, Sun does not expect huge price cuts as long as Singapore’s economy does not deteriorate badly and the unemployment rate remains moderate.

“We may expect the overall HDB resale price to trend between -2 and 1 per cent this year.”

HDB announced that over 7,800 Build-to-Order (BTO) flats will be offered in Ang Mo Kio, Choa Chu Kang, Bishan, Pasir Ris, Geylang, Tengah, Tampines and Woodlands in August. In November, another 5,700 flats will be offered in Bishan, Tampines, Sembawang, Toa Payoh and Tengah.

There will be shorter waiting times for the BTO flats in Tampines North and Choa Chu Kang (August) and Tengah (November). Remember to check out our news for all the latest updates. 

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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this or other stories, email victorkang@propertyguru.com.sg