More HDB resale flats sold in Oct after policy changes kick in

Higher grants for first-time buyers took effect in September

Fri, Nov 08, 2019

MORE Housing and Development Board (HDB) resale flats were sold last month compared with previous months after higher grants and income ceilings for first-time buyers took effect in September.

In all, 2,213 HDB resale flats changed hands, an 18 per cent increase from September, real estate portal SRX Property said on Thursday. Compared with a year ago, the resale volume was 10.6 per cent higher.

Four-room flats made up 40.8 per cent of the units sold last month. Five-room flats were 24.3 per cent; three-room flats 25.4 per cent; and executive flats 7.5 per cent. The rest were multi-generation and two-room flats.

Analysts say the policy changes last month could have had an impact on the resale market.

In September, the government announced a new Enhanced CPF Housing Grant (EHG) of up to S$80,000 available to eligible first-time flat buyers, regardless of whether they get a new or resale flat. There are also no restrictions on their choice of flat type and location.

ERA Realty head of research and consultancy Nicholas Mak said: "Home buyers are probably capitalising on the (EHG) grant, as transaction volume increased in October.

This figure is the highest since July last year, almost 21 per cent more than the 12-month average."

Christine Sun, head of research and consultancy at OrangeTee, said: "Demand for HDB resale flats has continued to strengthen after a number of new policies have been introduced progressively in recent months."

Resale flat prices in October dipped by 0.2 per cent over September's figures, although this was still 0.1 per cent higher than a year ago.

Compared with their peak in April 2013, October resale prices were 14.3 per cent lower. Prices in non-mature estates rose by 1.1 per cent year on year while those in mature estates fell 1.3 per cent.

The most expensive resale flat last month was a five-roomer at The Pinnacle@Duxton, which went for S$1.1 million. An executive maisonette unit in Hougang was sold at S$850,000, the highest price in a non-mature estate.

SRX calculations showed that resale flat buyers in October paid what it estimates to be the market value for flats, neither over- nor underpaying.

The data showed that the overall median transaction over X-value (TOX) was zero last month.

TOX measures how much a buyer is overpaying (positive value) or underpaying (negative value) for a property based on SRX's computer-generated market value. The data only includes districts with more than 10 resale transactions.

HDB executive and five-room flats recorded positive median TOX values of S$6,000 and S$2,000 last month, while three-room and four-room flats both recorded a negative median TOX value of S$1,000.

Flats in Serangoon recorded the highest median TOX at positive S$9,500, while those in Queenstown recorded the lowest median TOX, at negative S$12,000.

ERA's Mr Mak expects the resale volume in the next month to remain high, with home buyers continuing to make use of various government housing grants.

OrangeTee's Ms Sun said that prices should remain stable despite the increased demand: "More flats will be reaching their five-year minimum occupation period and HDB is likely to increase the supply of flats in 2020. The increasing supply of flats is likely to keep prices in check in the coming months."

SRX forecasts that in the next three months, 2,320 flats will be put on the resale market as they approach their five-year minimum occupation period.