For the whole of 2020, prices grew 5%, the steepest increase since Q4 2012 and higher than the 0.1% gain registered in 2019.
Despite the difficult economic conditions, the HDB resale market remained in good shape, with prices rising for the third consecutive quarter by 3.1% in the fourth quarter of 2020.
It is also the highest quarterly hike since Q3 2011, when prices jumped 3.8%.
For the whole of 2020, prices grew 5%, the steepest increase since Q4 2012 and higher than the 0.1% gain registered in 2019.
In a release issued on Friday (22 January), HDB revealed that resale transactions fell 1.9% to 7,642 units in Q4 2020 from 7,787 units in Q3 2020. Nonetheless, the figure was higher by 20.6% compared to Q4 2019’s units.
For the whole of 2020, resale transactions climbed 4.4% to 24,748 cases from 23,714 cases previously.
Despite the hike in prices, Christine Sun, Senior Vice President of Research and Analytics at OrangeTee & Tie, believes that the HDB market is still not at risk of a housing bubble – typical signs of which include excessive speculative buying, the decoupling of prices from housing income and many buyers overleveraging in their property acquisition.
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“Many measures have already been put in place to prevent some of these scenarios from occurring,” she said.
“Further, prices of HDB resale flats are still 7.6% below the peak in Q2 2013. Previously, prices soared by 17 continuous quarters from Q2 2009 to Q2 2013 to reach the peak price. The cumulative price growth was 49.4% over that period. Subsequently, prices either stagnated or fell quarterly for about six years,” she explained.
She noted that resale prices have only emerged from the doldrums in 2020 and are still on a slow climb up. In fact, prices have increased by just 5.6% from Q2 2019 to Q4 2020.
HDB said the number of approved applications to rent out HDB flats rose 3.4% to 8,472 cases in Q4 2020 from 8,196 cases in Q3 2020. The figure was 29.9% lower versus Q4 2019’s 12,079 cases.
As at end-Q4 2020, 59,092 HDB flats were rented out, up 0.05% from the 59,063 units rented out in Q3 2020.
Sun expects the overall rents to increase by up to 3% this year, with rental applications hitting 42,000 to 44,000 units.
Moreover, she expects prices and demand for HDB resale flats “to rise further as the global economic outlook is likely to be more favourable this year”.
“With mass immunization being rolled out around the world, the worst of the pandemic could be over by the end of this year and key economies may fare better than last year.”
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She expects the HDB resale market to continue seeing a flurry of activities as the soft employment market cause more families to downgrade to HDB flats from private homes. Couples still thriving in their jobs, on the other hand, will likely proceed with their upgrading plans, leading to more flats being put on sale.
“Therefore, we are optimistic that the HDB resale volume may rise further by 3 to 5% this year, to around 24,000 to 26,000 units. Prices of resale flats may continue to rise by 2 to 5% for the whole of 2021,” said Sun.
Meanwhile, HDB announced that around 3,700 Build-To-Order (BTO) flats in Kallang Whampoa, Bukit Batok, Toa Payoh and Tengah will be offered in February.
“This includes the new Community Care Apartments in Bukit Batok,” it said.
Another 3,800 BTO flats in Geylang, Bukit Merah, Tengah and Woodlands will be launched in May.
“Given the economic uncertainty due to COVID-19, HDB is monitoring the housing market closely and will calibrate the supply if required,” it added.
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