SINGAPORE — The number of resale flats sold rose by nearly 19 per cent in the third quarter of this year, as prices remained flat, according to data released by the Housing and Development Board (HDB) on Friday (Oct 26).

Resale transactions rose from 5,941 in the second quarter to 7,063 in the third quarter.

Compared with the same period last year, the number of resale flats that changed hands in Q3 was 21.6 per cent higher.

However, prices remained mostly flat, dipping by a less than an expected 0.1 per cent from the previous quarter. A previous flash estimate earlier this month put the decline at 0.2 per cent.

Resale prices of flats have been on the downward trend since the third quarter of last year when prices fell 0.7 per cent. The decline continued into the last quarter of 2017 when it dipped a further 0.2 per cent, and went down 0.8 per cent in the first quarter of this year.

In the second quarter of 2018, it inched up by 0.1 per cent before dipping again in the third quarter.

Source: HDB

BTO LAUNCH

On Friday, HDB said it will also offer about 3,800 Build-To-Order (BTO) flats in Sembawang, Sengkang, Tampines, Tengah and Yishun in November.

Those in Sembawang, Sengkang and Yishun will have a shorter waiting time of 2.5 years, instead of the typical three to four years.

There will also be a concurrent Sale of Balance Flats exercise, the HDB added.

Mr Lee Sze Teck, head of research at property broker Huttons Asia, said the current situation is similar to the late 1990s, when the HDB market was flooded with over 31,000 unsold units which took more than five years to sell. Then the supply overhang caused HDB resale prices to stay stagnant for eight years.

He added that since 2011, the HDB has supplied the market with massive numbers of BTO flats. This is estimated to be around 21,000 per year.

While the supply has tapered off, there is still a substantial number of unsold BTO flats, judging from the number of Sale of Balance Flats and Re-offer of Balance Flats launches, said Mr Lee. Furthermore, Permanent Residents (PRs) are not allowed to purchase a HDB flat within the first three years of obtaining their PR status.

“With demand still largely constrained to PRs, singles and second-timers, the resale market is unlikely to pick up anytime,” he said, adding that the large BTO supply and the urgency of upgraders and downgraders needing to sell their flats only adds to the supply overhang in the market.

PRIVATE PROPERTY

According to data released by the Urban Redevelopment Authority (URA) on Friday, the increase in private property home prices has slowed considerably, rising 0.5 per cent in the third quarter, compared with a 3.4 per cent increase in the previous quarter.

This follows the latest round of cooling measures in July, when the Government raised Additional Buyer’s Stamp Duty (ABSD) rates, and tightened the Loan-to-Value (LTV) limits for Singapore citizens.

However, prices of non-landed properties remained flat, while landed property prices rose by 2.3 per cent compared with the 4.1 per cent increase last quarter.

Despite the latest round of cooling measures, non-landed properties in the Core Central Region (CCR) saw the best showing with prices still on the upward trend, increasing 1.3 per cent in third quarter of 2018, compared with the 0.9 per cent increase in the previous quarter.

In the Rest of the Central Region (RCR), non-landed property prices fell by 1.3 per cent, compared with the 5.6 per cent increase in the previous quarter.

Outside of the Central Region, prices of non-landed properties went down by 0.1 per cent, compared with a previous quarter rise of 3 per cent.

Source: URA

PropNex’s chief executive officer Ismail Gafoor said that the performance of the overall volume of private residential homes in Q3 2018 is encouraging despite the cooling measures.

“However, the numbers were largely attributed to the surge of uncompleted new homes sales as buyers rushed to buy units on the eve of the cooling measures (in July),” he said.

“Generally, an immediate reaction to any cooling measures would be a ‘wait-and-see’ attitude from buyers and investors. However for new launches we saw healthy take-up rates as developers reacted quickly with sensitive pricing to entice buyers.”

On the other hand, the resale market saw sellers holding on to their prices, and buyers were not as forthcoming in the take-up of resale properties, he said.