February’s HDB flat sales dip

The number of resale HDB flats which exchanged hands dipped last month following a slight rise in January. The lull could be due to the Chinese New Year festivities.

HDB in Queensway. Picture: iProperty

15.8% fall in resale HDB flat sales from January

The shorter month and Chinese New Year holidays may have a part to play in the 15.8% decline in resale HDB flat transactions last month.

Despite the dip, the number of flats sold last month was still 9.9% higher than that of the same month last year.

1,313 resale HDB units were sold in February with prices mainly staying flat. The HDB market has been stablising for some time now, with slight fluctuations from month to month.

Analysts continue to attribute part of the decline to consumers’ concerns about the depreciating value of older HDB flats.

HDB, Gangsa Road. Picture: iProperty

There is however a general sense of HDB flat sellers taking longer to find buyers for their units. Resale HDB flat prices have fallen more quickly than that of private properties in recent months.

This, however, could mean a widening price-gap between public and private properties which could play to the advantage of rare or larger-sized HDB flats such as 5-room flats, executive flats or maisonettes.

There is however fiercer competition in the HDB flat market as more units which have fulfilled their 5-year minimum occupation period (MOP) has entered the market.

Less restrictive use of CPF funds could benefit HDB flat market

The government has just announced their move to relax restrictions on use of CPF funds for housing come May this year. This could benefit the resale HDB flat market as more will now qualify to use less out-of-pocket cash to pay for more resale flats.

The authorities are keen to boost the liquidity of older flats but caution buyers against possible “over-borrowing”. This could be especially applicable to younger home buyers who may outlive the lease of their HDB flat.

See more: 3 new moves to help HDB flat buyers