Despite covid-induced contraction, Singapore economy shows resilient and that is reflected in many sectors including Singapore’s dynamic public housing sector.
Resale prices in the public housing market increased 3 per cent in the first quarter of 2021 from the previous quarter, the Housing and Development Board (HDB) said on Friday (Apr 23).
The resale price index, which provides information on the general price movements in the resale public housing market, shoot up from 138.1 to 142.2, a slightly above flash estimates.
This is the fourth consecutive quarter of growth in prices despite the COVID-19 pandemic.
HDB prices are “inching closer” to the peak prices recorded in the second quarter of 2013, said Ms Christine Sun, senior vice president of research and analytics at OrangeTee and Tie.
Surge in transactions
HDB resale transactions increased 28.6 per cent in the first quarter of 2021 compared with the same period last year, when the COVID-19 outbreak started. Comparing the last quarter of 2020, transactions declined slightly by 0.8 per cent – from 7,642 to 7,581.
Sales volume has retained above 7,500 for three consecutive quarters.
“Last quarter, many flats were sold with cash over valuation. Multiple offers and price bidding wars for choice flats were common as buyers were willing to shell out extra for premium flats as they believe that supply of these flats is limited especially for newer resale flats in mature estates,” said Ms Sun.
Overall resale volume dropped slightly in the last quarter on the back of rising resale prices and increasing cash over valuation, she added.
“The supply and demand imbalance of flats has also caused prices of HDB resale flats to climb in certain locations,” she said.
The HDB will provide about 3,800 Build-to-Order (BTO) flats in Bukit Merah, Geylang, Tengah, and Woodlands in May.
In August, the housing board will provide about 4,900 BTO flats in Hougang, Jurong East, Kallang Whampoa, Queenstown and Tampines.
“Given the economic uncertainty due to COVID-19, HDB is monitoring the housing market closely and will calibrate the supply if required,” said the board.
The HDB resale market is likely to see a “continual stream” of new entrants in the coming months, said Ms Sun.
“Supply of BTO flats in the upcoming project launches will continue to be limited and the number of unsuccessful BTO flat applicants will remain high especially for popular sites or mature estates. Unsuccessful BTO flat applicants may turn to the HDB resale market to satisfy their housing needs,” she further said.
The completion period for BTO projects that are still to be launched is expected to be long due to a backlog of projects facing construction delays due to COVID-19.
“The situation could be exacerbated as further construction delays may be expected as a result of new quarantine orders arising from the recent resurgence of COVID-19 cases in certain dormitories,” she said.
Although Covid-related safety measures may delay the construction of houses, comparatively impressive surge in the housing market indicate a positive economic outlook of the nation, which among other things, is a financial and business services hub of the region and the accompanied economic expansion demands more and more housing. This housing demand is reflected in the surge in the Singapore’s lucrative housing market.
