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SINGAPORE – The Housing Board’s resale market ended 2020 on a strong note, with prices flat rising in many places and buyer demand remained buoyant despite the Covid-19 pandemic.
HDB resale apartment prices rose for the third consecutive quarter, rising 3.1% in the final three months of 2020 compared to the previous quarter, according to data released by HDB on Friday (January 22).
This marks the largest quarterly increase since the third quarter of 2011, when prices rose 3.8 percent.
For all of 2020, prices were up 5%, the steepest increase since the fourth quarter of 2012, when prices were up 6.5%.
This is also higher than the 0.1% price increase in 2019.
HDB’s resale apartment sales reached an eight-year high in 2020 with the number of resale transactions increasing 4.4 percent to 24,748 units, from 23,714 units in 2019.
The highest number on record was in 2012 when 25,094 HDB resale floors changed hands.
In the fourth quarter of 2020, resales fell: 7,642 units were sold, 1.9 percent less than the 7,787 units in the previous quarter. However, year-over-year sales increased 20.6 percent from the 6,339 units sold in the fourth quarter of 2019.
Christine Sun, senior vice president of research and analysis at OrangeTee & Tie, said the price increase was unexpected due to the economic crisis triggered by Covid-19 and a growing supply of HDB floors.
However, the large number of stimulus measures launched by the government, such as the Employment Support Program to support the economy, have helped shore up the HDB market, he said.
“Most of the workers were able to maintain their earnings with the help of various schemes. Some buyers were confident that they had the ability to pay off their home loans and proceeded with the purchase of their new homes,” Ms. Sun said.
He noted that Singapore is “reaping a harvest of market stability” as a result of strict measures such as the total debt service ratio, the mortgage service ratio and the seller’s stamp tax that were set over the years. years.
“In retrospect, these measures have sown good seeds of financial prudence and soundness in the financial system, preventing most buyers from over-leveraging and creating a buffer against huge credit losses in times of market uncertainty.” said.
Ms. Sun said that despite the price hikes, she believes the HDB market is not at risk of a housing bubble for now.
“Typical signs of an asset bubble include decoupling of prices from home income and excessive speculative buying activities … Many measures have already been put in place to prevent some of these scenarios from occurring,” he said.
He also noted that HDB’s flat resale prices are still 7.6% below their peak in the second quarter of 2013. HDB’s resale prices have increased for 17 continuous quarters from the second quarter of 2009 to reach that peak. .
PropNex’s head of research and content, Wong Siew Ying, said the 5 percent price growth in 2020 is likely “good news” for HDB floor owners, as prices had fallen for six years in a row since 2013 to 2018.
“Given that HDB resale house values have been quiet for some time, we believe the price increase in 2020 is measured and we expect prices to potentially increase 3-5 percent this year,” said.
On the HDB rental market front, approved applications to rent HDB flats increased by 3.4 percent, from 8,196 units in the third quarter of 2020 to 8,472 units in the fourth quarter of 2020.
The number of approved applications was 29.9% lower than the 12,079 units approved in the fourth quarter of 2019.
At the end of 2020, a total of 59,092 HDB flats were rented, a slight increase of 0.05% over the previous quarter.
While the HDB resale market has weathered the pandemic quite well, the same cannot be said for the HDB rental market, said ERA Realty’s director of research and consulting, Nicholas Mak.
For all of 2020, HDB’s rental volume contracted 19.5 percent year-on-year to 38,798 apartments, the largest rate of decline since that data was made publicly available in 2006, it noted.
Mak said: “Demand for HDB apartment rentals was hit hard by the slowdown in the local economy and the job market.”
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