The Straits Times 22nd October 2021
HDB resale prices hit record high in Q3 after 2.9% gain
by Michelle Ng
SINGAPORE - Housing Board resale flat prices hit a record high in the third quarter and saw the fastest nine-month climb in more than a decade, going by data released on Friday (Oct 22).
Resale prices rose 2.9 per cent in the July-September period from the previous three months, higher than HDB's flash estimate of 2.7 per cent, to exceed their previous peak in 2013 by 0.8 per cent.
It brings the price increase for the first nine months of this year to 9.1 per cent.
This is the steepest three-quarter increase in more than a decade when prices rose by 11.3 per cent over the first three quarters of 2010, noted Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie.
Five-room flats in the mature town of Queenstown were the most expensive in the third quarter with a median price of $926,000, followed by Bukit Merah at $822,500 and Toa Payoh at $818,000.
Median prices of five-room flats in Queenstown, one of Singapore’s most sought-after housing estate, was $932,500 in the second quarter, and was $820,000 in the first quarter of this year.
The third quarter’s median resale price of five-room flats in the central area, which covers The Pinnacle @ Duxton where there have been a number of million-dollar HDB transactions, is not provided in the HDB data.
However, the median resale price of a four-room flat in the central area is recorded as $950,000.
HDB data also showed that resale transactions also rose by 19.4 per cent to 8,433 units in the third quarter, up from 7,063 units in the second quarter.
Year on year, transactions in the third quarter were 8.3 per cent higher than for the same period last year.
Ms Sun said sales were robust despite the Hungry Ghost Festival and viewing restrictions imposed during the three-month period as demand is currently outstripping supply in many locations.
On the rental front, HDB approved fewer units for lease. In the third quarter of this year, 10,417 units were approved to be rented out, down 5.1 per cent from the 10,979 units the previous quarter.
At the end of September this year, 57,321 HDB flats were rented out, down 0.8 per cent from the previous quarter.
As for resale prices, they have climbed for the sixth consecutive quarter and are set to end on a high note this year, said market experts.
The HDB resale market has been "on fire" in 2021, said Ms Sun.
"Home prices are pushing new boundaries as demand outweighs supply in many locations. The market exuberance has been propped by a recovering economy, low mortgage rates and new buyer demand as a result of construction delays of Build-To-Order (BTO) flats," she said.
Huttons Asia senior director of research Lee Sze Teck noted that prices have increased 14.2 per cent since the circuit breaker in the second quarter of last year and 15.1 per cent since prices hit bottom in the second quarter of 2019.
However, he believes prices have reached a peak due to signs of buyer resistance.
Mr Lee predicts that between 29,000 and 30,000 flats will change hands this year, with prices up by another 2 per cent to 2.5 per cent in the last quarter of the year.
This will bring the price gain for the whole of 2021 to more than 11 per cent, the biggest jump since 2010.
Mr Mohan Sandrasegeran, research and content analyst at real estate agency Ohmyhome, said while strong demand has strengthened resale prices, historically double-digit growth in the price index is "not sustainable for the long term".
This article is written by Michelle Ng from The Straits Times forum. Click here for the original article.
A version of this article appeared in the print edition of The Straits Times Forum on October 22nd 2021, with the headline 'Median price of 5-room HDB resale flats in Queenstown now $926,000 in record year for market.'