Last month, a transaction in Punggol came fairly close as a nine-year-old premium flat was sold for $910,000, showed OrangeTee & Tie’s HDB Market Pulse Q1 2021 report.
Prices of Housing and Development Board (HDB) resale flats in non-mature estates such as Sengkang, Choa Chu Kang and Punggol have been on the uptrend, with a record 23 of such flats transacted for at least $800,000 between January and March this year, according to a property report.
This accounted for almost 10% of the 245 flats within non-mature estates that were sold above $800,000 in a single quarter since 1990.
If the trend continues, analysts believe that prices of HDB resale flat in Punggol could soon hit $1 million, reported TODAY.
“Barring further external shocks, an influx of flat supply or cooling measures, we may see more flats inching closer to the S$1 million mark (in non-mature estates) … at the current rate of price increase,” said Christine Sun, OrangeTee & Tie’s Senior Vice President of Research and Analytics as quoted by TODAY.
While this milestone had been frequently breached by HDB flats within mature estates, they had never been breached in non-mature towns.
Last month, a transaction in Punggol came fairly close as a nine-year-old premium flat was sold for $910,000, showed OrangeTee & Tie’s HDB Market Pulse Q1 2021 report.
Spanning 147 sq m, the two-storey HDB loft unit is located on the Treelodge@Punggol project’s top floor – attributes that are relatively rare in public housing.
Suggested read: What Are HDB Loft Units And Is it Illegal to “Build” Your Own Loft?
Only 15 flats within non-mature estates were sold above $900,000 since 1990, of which four were registered between 2019 and 2021.
On why some were willing to splurge for a flat located in Punggol, which is considered by others as inaccessible and far-flung, Sun explained that enhancements to the estate as well as extensive town planning like the upcoming Punggol Digital District appear to have drawn buyers into the area.
“A new university campus, market village, heritage trail, offices, logistic hub and amenities will be established over the next few years. The progressive enhancements have continued to entice buyers to Punggol and Sengkang,” said Sun.
Savills Singapore’s Executive Director of Research and Consultancy Alan Cheong said the two estates are “demographically dominated by younger families, and this youthful vibrancy reinforces the positive view amongst those who are looking for a home”.
Aside from Punggol, the surging trend of HDB resale prices was also witnessed in all other non-mature estates, said analysts.
Resale data for all other non-mature estates showed a general price hike during the pandemic, with Woodlands, Choa Chu Kang, Bukit Panjang, Hougang and Sembawang posting price increases in double-digit percentage terms.
Based on data compiled by Huttons Asia, the average price of a five-room HDB flat in a non-mature estate in Q1 2021 was about 11% higher than during pre-pandemic 2019.
“The differentiation between mature and non-mature estates has blurred over the years. As connectivity and amenities improved in non-mature estates, some of the resale flat prices are very close to mature estates,” said Lee Sze Teck, Director of Research at Huttons Asia as quoted by TODAY.
In fact, resale HDB prices at non-mature estates have surpassed those within mature estates during the course of COVID-19 pandemic, said Cheong, citing his firm’s data.
Comparing March this year and December 2019, average prices of HDB resale flats in non-mature estates increased 11.9%, while those located in mature estates climbed 8.7%.
“Generally speaking, resale prices have risen across the board in both mature and non-mature estates. However, prices of resale flats in the non-mature estates rose more versus those from mature ones,” said Cheong as quoted by TODAY.
Much like those for mature estates, experts also attributed the buoyant price trend within non-mature estates to the pent-up demand following the circuit breaker, the current low cost of borrowing as well as optimism on vaccines and a recovering economy.
Moreover, many of the buyers may be downgrading from private property, or want to be near their family; hence, the reason for Punggol and Sengkang’s popularity, they added.
“The delays in the construction of Build-to-Order flats made some switch over to the resale market. Another reason is that Singaporeans who lost their jobs overseas are returning and are looking for an affordable home to move into quickly,” said Cheong, who expects HDB resale prices to increase a further 10% by end-2021.
Recommended article: Should You Buy a Balance Flat (HDB SBF/Open Booking) or a Resale Flat?
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Victor Kang, Digital Content Specialist at PropertyGuru, edited this story. To contact him about this story, email: victorkang@propertyguru.com.sg
