HDB resale prices increased 8.1% year-on-year.
Resale prices of Housing and Development Board (HDB) flats increased 3% quarter-on-quarter in the first quarter of 2021, marking its fourth consecutive quarterly hike, showed HDB data on Friday (23 April).
On an annual basis, HDB resale prices rose 8.1%.
Christine Sun, Senior Vice President of Research and Analytics at OrangeTee & Tie, said HDB resale prices are inching closer to the peak price posted in the second quarter of 2013.
She noted that many flats were sold with cash-over-valuation (COV) in Q1 2021.
“Multiple offers and price bidding wars for choice flats were common as buyers were willing to shell out extra for premium flats as they believe that supply of these flats are limited especially for newer resale flats in mature estates,” she said.
Given the higher prices and increasing COV, HDB resale volume dipped 0.8% to 7,581 units in Q1 2021 from 7,642 units in Q4 2020.
On an annual basis, sales rose 28.6% from 5,893 units in Q1 2020.
Meanwhile, Huttons Asia Director of Research Lee Sze Teck noted that the 7.8% increase in HDB resale prices since the implementation of the circuit breaker in Q2 2020 outpaced the 6.3% price growth in the private market.
“With more instances of cash over valuation happening, it has raised the question of affordability and whether there is a need for the government to review the situation,” he said.
Over at the HDB rental market, HDB revealed that the approved applications to rent out HDB flats rose 26% to 10,676 units in Q1 2021 from 8,472 units in Q4 2020. Compared to the previous year, the number of approved applications was 7.9% lower.
Looking ahead, Sun expects the HDB resale market to “see a continual stream of new entrants in the coming months”.
“Supply of Build-to-Order (BTO) flats in the upcoming project launches will continue to be limited, and the number of unsuccessful BTO flat applicants will remain high, especially for popular sites or mature estates. Unsuccessful BTO flat applicants may turn to the HDB resale market to satisfy their housing needs,” she said.
She expects the completion period for yet-to-be-launched BTO projects to remain long, given the backlog of projects facing construction delays due to the pandemic.
“The situation could be exacerbated as further construction delays may be expected as a result of new quarantine orders arising from the recent resurgence of Covid-19 cases in certain dormitories,” added Sun.
Meanwhile, HDB said it would offer around 3,800 Build-To-Order (BTO) flats in Geylang, Bukit Merah, Tengah and Woodlands in May.
In August, another 4,900 BTO flats will be offered in Hougang, Kallang Whampoa, Jurong East, Queenstown and Tampines.
Lee expects the May BTO launch to register high interest for the Geylang and Bukit Merah flats.
“The Bukit Merah BTO is the first since the launch of Telok Blangah Parcview in 2013. The Geylang BTO is right next to the Macpherson MRT interchange. We can expect more than ten applicants for each flat,” he said.
Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: email@example.com