HDB resale prices up for 9 months in a row, could pass all-time high
BTO delays, rising values of private homes, improving sentiment cited as reasons
The hot streak continues for Housing Board flats, with resale prices up again last month - the ninth straight month of increase - and the all-time high now within touching distance.
Buyers are being driven to the sector by a cocktail of factors, including rising values in the private home market, improving market sentiment amid easing restrictions, and delays in Build-To-Order (BTO) flats.
The result was a 0.8 per cent price rise from February to last month, according to flash data from real estate portal SRX out yesterday.
Resale prices are now 9.5 per cent above the level of March last year, and just 4.9 per cent below their peak in April 2013.
That peak may be passed by the second half of this year if the current rate of increase - about 1 per cent a month, based on SRX data - is maintained, noted Ms Christine Sun, OrangeTee & Tie's senior vice-president of research and analytics.
Mr Nicholas Mak, head of research and consultancy at ERA, said yesterday that prices are up due to robust demand from buyers who prefer the certainty of getting their flats in the resale market to avoid the risk of construction delays for BTO homes.
Both Mr Mak and Mr Sun noted that cash over valuation (COV) - the amount buyers fork out if the sale price exceeds the HDB valuation - has been rising in recent months.
The average COV has increased in some locations, from $10,000 to $20,000, to $30,000 to $40,000, said Ms Sun, adding that rare and attractive units can command a COV of more than $80,000 in some cases.
"Buyers are willing to pay a higher COV as they believe the supply of choice units is limited, especially newer flats in mature estates," she said.
SRX's data yesterday notes that the pace of monthly increases has slowed of late - from 1.7 per cent in January to 1.4 per cent in February and 0.8 per cent last month.
The data also showed sales picking up after the Chinese New Year lull, with 2,448 flats changing hands last month, a 13.1 per cent increase over February.
March sales were also 25.6 per cent higher than the same month last year.
Mr Mak said HDB resale prices overall could increase 7 per cent to 10 per cent this year.
On Wednesday, the Government announced that about 85 per cent of BTO projects are around six to nine months behind schedule due to construction delays caused by manpower shortages and supply chain disruptions.
This means about 43,000 households will get the keys to their flats late.
Ms Wong said: "In the near term, we anticipate demand for resale flats to stay relatively healthy on the continued improvement in market sentiment, as well as the optimism arising from the projected rebound in the Singapore economy this year.
"That said, we remain watchful of policy risk and any potential impact on the HDB resale segment, as the authorities monitor price trends in the property market."