HDB resale market outperforms expectations: OrangeTee

The HDB resale market exceeded expectations as applications to sell HDB flats rose 18.9% q-o-q to 7,063 units in 3Q2018, notes OrangeTee & Tie in its public housing market report released on Nov 21. This brings total resale applications in the first three quarters of the year to a five-year high of 17,462.

Resale transactions from January to September at or exceeding $700,000 achieved a six-year high, at 1,438, says OrangeTee. This is a rise of 68.6% over the same period in 2013, when the figure stood at 853. On a y-o-y basis, this marks a 22.8% rise, from 1,171 flats sold.

For the first three quarters of the year, 52 HDB units that were sold at prices at or exceeding $1 million. Of these, 40 were below 20 years old, while 12 exceeded that. Significantly, a 2,551 sq ft HDB terrace at Jalan Bahagia was sold for $1.185 million in September, trumping the prior record, for a five-room, 1,259 sq ft unit in Toa Payoh sold for $1.16 million in August.

In the broader resale market, prices have been on a general downtrend in the past few years. Since 2Q2015, changes in prices of resale flats have been fluctuating between -1% and 1% q-o-q. In 3Q2018, prices dipped marginally by 0.1% q-o-q. For the first three quarters of this year, prices slipped 0.8%.

Resale popularity based on location

Non-mature towns saw a higher number of resales in 3Q2018 compared with mature estates, observes OrangeTee. Sengkang led with 528 units, followed by Woodlands at 516 units, Jurong West at 505 units, and Punggol at 469 units.

The high supply of new buildto-order (BTO) flats in Punggol and Sengkang has not dampened the resale market there. The four- and fiveroom flats in the two towns saw a y-o-y price increase for the period of January to September. In comparison, flats in Bukit Batok, Jurong West, Choa Chu Kang, Woodlands and Yishun saw prices fall across all room types over the same period.

For the first three quarters of the year, resale applications in Punggol leapt 334.4%, from 276 units in 2013, to 1,199 units in 2018. Sengkang registered the next highest jump, rising 58.3% to 1,244 units.

Rents

The HDB rental market remains weak. Approved applications for renting out of HDB units fell 6.7% q-o-q, from 12,024 cases to 11,216 in 3Q2018. The number of flats rented out has increased 2.1% over the same period, from 54,896 units at June 30 to 56,074 units at Sept 30.

BTO flats

The subscription rates of new BTO units are lower than last year’s figures, says OrangeTee. The government released fewer BTO flats for the second consecutive year — only 15,817 units, a 10% decrease y-o-y and a 41.6% reduction from the high of 27,084 units in 2012.

This year, 17 BTO projects were released. Yishun Glen led with 1,693 units, followed by Plantation Grove with 1,620 units, and Tampines Greenvines with 1,271 units.

OrangeTee forecasts that more resale flats will be put up for sale in Sengkang, Yishun and Punggol in the coming months, as these towns have the most flats reaching Minimum Occupation Period. In total, the firm expects about 17,000 units to reach MOP in 2018.

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