HDB resale flats sales dropped 3% despite slightly lower prices

The sale Housing Board (HDB) resale flats in December last year declined by three per cent compared to the November despite the slight dip in prices. SRX Property (SRX), a real state portal stated on Thursday (Jan 9) that a total of 1,858 HDB resale flats were purchased last month.

Year-on-year comparison suggests that resale volume last month was 29.6 per cent higher. In 2019, a sum of 22,477 HDB resale transactions occurred, which is 3.4 per cent more than in 2018.

The composition of resale units last month include four-room flats at 41.3 per cent, three-room flats at 25.8 per cent, five-room flat at 23.3 per cent, executive condominium flats at 7.7 per cent and the remaining being two-room flats.

Comparing December to the previous month, resale flat prices declined by 0.3 per cent, but this figure is still 0.4 per cent higher than December 2018, and 14 per cent lower than the peak price in April 2013.

Based on estate maturity, mature estates prices dropped by 1.4 per cent whereas non-mature estates prices dropped by 1.6 per cent year-on-year.

A four-room flat located in The Pinnacle@Duxton was sold at S$1.06 million, making it the most expensive resale flat in December. Also, in Punggol, a five-room premium flat was sold at S$871,000, making it the most expensive non mature estate unit.

According to SRX forecasts, 4,785 flats approaching five-year minimum occupation period will enter the resale market in the next three months. Estimates suggest that resale flat purchasers in December paid S$1,000 above the market value and S$2,000 more than in November last year.

December’s overall median transaction over X-value (TOX) by SRX data showed that TOX was positive $1,000. TOX figures show if a property price is undervalued or overvalued by using SRX’s computer-generated market value. A negative TOX value suggests that a purchaser is underpaying whereas a positive TOX value suggests overpaying.  Only districts with not less than 10 resale transactions are covered by the data.

Looking at the TOX figures, five-room flats are underpaid as shown by the negative median TOX value of S$2,000. On the other hand, HDB executive condominium flats, three-room and four-room flats are all overpaid as shown by their positive median TOX values of S$15,000, S$1000 and S$1000 each in the last month.

The highest recorded median TOX value was the flats in Serangoon at positive S$40,000, whereas the lowest was in Bishan at negative S$6,000. The fall in the sale resale figures in December could be due to seasonal factors.

According to the real estate agency, OrangeTee’s head of research and consultancy Ms Christine Sun, “Housing activities typically slow down in December since most potential buyers are still on holiday and many sellers prefer to hold back their listings to the start of the following year.” Ms Sun expected the sales volume to increase again this year.

Last September’s policy changes such as the new Enhanced Central Provident Fund (CPF) Housing Grant will allow more room for using CPF funds to buy older flats which will in turn lead to more demands. She further added that, “The overall market performance for 2019 is considered commendable given the macroeconomic uncertainties and slower economic growth.”