HDB resale flat transactions hit four-year high

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More Housing Board resale flats changed hands in the second quarter this year - reaching a four-year high, the latest official data showed.

Analysts said this was due to a confluence of factors, such as increased government grants and a stable resale market, giving buyers the confidence that prices are unlikely to drop much further.

Yesterday, the HDB said the number of resale transactions increased by 32.5 per cent, from 4,530 in the first quarter of this year to 6,001 in the second. The last time transactions for a quarter crossed the 6,000-mark was in the third quarter of 2012, when 6,560 resale applications were registered.

Data also showed that the resale price index dipped by 0.1 per cent from the first quarter to the second.

Observers said this was in line with the stable prices for the past few years. Resale prices have been on a gradual decline since 2013.

The stability has continued to entice more buyers, especially young couples, into the resale market, PropNex chief executive Ismail Gafoor said.

Resale volume has been on the rise since the record low of 17,318 in 2014. There were 19,306 sales in 2015 and 20,813 last year.

Mr Ismail said he expects transactions to cross the 22,000 mark this year and the recently enhanced grants have also helped.

Earlier this year, the Central Provident Fund Housing Grant was raised to $50,000 for those buying four-room or smaller resale flats, and to $40,000 for five-room or larger resale flats. It was previously capped at $30,000 for both.

Some new buying patterns have also emerged, said experts.

"Older flats are facing a slowdown in demand as buyers are concerned about the expiring lease," said property consultancy Edmund Tie & Company research head Lee Nai Jia.

This follows the debate sparked by National Development Minister Lawrence Wong's blog post in March, in which he cautioned buyers of older resale flats against paying high prices on the assumption that such flats would later be acquired by the HDB for future development, and owners compensated at market value.

Dr Lee said "larger units near developments that have successfully completed a collective sale are likely to see stronger demand and an increase in price".

hdbsalesLawrence Wong