HDB resale flats demand still strong in third quarter

An analyst puts it down to government measures aimed at improving affordability

Sat, Oct 26, 2019


DEMAND for Housing Board (HDB) resale flats remained strong in the third quarter of 2019, buoyed by recent policies that have made it easier for buyers to get loans and grants.

There were 6,264 resale transactions between July and September, down by just 12 from the second quarter, when there were 6,276 cases, said the HDB on Friday.

The data, which covers the Hungry Ghost month (when buying sentiment is usually more muted), comes after a surge in resale transactions in the preceding quarter. The second-quarter numbers were up 29.8 per cent from the 4,835 cases in the first quarter.

The number of resale transactions in the third quarter was 11.3 per cent lower than that in the third quarter of last year.

However, it was the second highest Q3 transaction in the last seven years.

Christine Sun, head of research and consultancy at OrangeTee & Tie said: "This sustained level of demand was buoyed by the generous incentives and slew of policy initiatives dished out by the government."

Last month, new policy measures to ensure affordable and accessible housing to all Singaporeans were announced.

These included enhancements of housing grants for first-time buyers.

They came on top of measures announced in the second quarter, when buyers were granted greater flexibility in using their Central Provident Fund monies as well as bigger housing loans.

Ms Sun added: "The cumulative effect of these policy changes is likely to sustain interest or even stimulate new demand for HDB flats in the long term. Despite a synchronised slowdown in many world economies, demand for resale transactions has remained surprisingly resilient."

The latest HDB data also indicated that the prices of resale flats rose slightly - by 0.1 per cent - from the second quarter, snapping a streak of four consecutive quarterly declines.

"It remains premature to conclude that prices have bottomed out the last quarter, as recent policy changes may have helped to stabilise the market," Ms Sun said.

In all, 17,375 resale flats were sold in the first three quarters of this year, almost on par with the 17,462 units sold over the same period last year.

Ms Sun expects between 22,000 and 24,000 transactions to be made in the whole year. "The overall price index may continue to stabilise in the last quarter, after having dipped 0.4 per cent in the first three quarters. We anticipate prices to trend between -1 and 0 per cent for the whole year," she said.

The HDB figures indicated that 12,006 applications to rent out flats were approved, 2.7 per cent fewer than the 12,33k5 green-lit in the previous quarter.

But this was 7 per cent higher than that approved during the same period last year.

As of Sept 30, 56,474 flats were being rented out, a rise of 1.3 per cent over the second quarter of this year.

HDB also said on Friday that it will be offering about 4,500 Build-To-Order (BTO) flats in Ang Mo Kio, Tampines and Tengah next month. In February 2020, it will offer 3,000 BTO flats in Sembawang and Toa Payoh.

More details are available on the HDB InfoWEB.