June may have been a good month not only for private residential property owners, but also for HDB flat sellers.
0.1% rise in HDB flat prices last month
Prices of resale HDB flats rose 0.1% last month though fewer units were sold. A total of 1,895 resale flats exchanged hands in June, down 8.7% from the 2,076 units sold in May.
In a year-on-year comparison, the number of units sold in June was also 4.8% lower than the 1,991 units sold in the same month last year.
As the private property market gradually becomes more buoyant and more new launches pepper the landscape, could HDB upgraders and new buyers be leaning away from the resale HDB market?
Despite a 0.1% rise in prices from May, June’s resale flat prices are still 0.8% lower than that in June 2018. Prices of resale flats have fallen 14.1% since the peak in April 2013.
Some of the unit-types did, however, fare better than the others with prices of 3-room, 5-room and executive flats rising 0.6%, 0.3% and 1.4% respectively.
Prices of 4-room flats fell 0.3%. Prices of resale flats in mature estates rose 0.4% while those in non-mature estates tell 0.1%.
Prices of resale flats expected to stay strong
Analysts are not overly concerned about the decrease in sales volume as the June school holidays may have accounted for the dip.
As more HDB flats reach the end of their 5-year minimum occupation period (MOP), more buyers could be enticed to consider these newer units with new private apartments as the former are often available more readily and have larger floor areas.
Recent policy changes will also allow buyers to utilize more of their Central Provident Fund (CPF) monies to purchase older resale flats, potentially growing the pool of eligible buyers.
They are however less positive about resale flat prices. Weakness in the overall resale flat market is expected with an estimated 0.8% fall in prices this year. Some mature estates are already seeing an increase in the value buyers are willing to pay above market price. In Bishan for example, buyers are paying an average of $18,000 above market price for resale units.
While 4-room flat prices fell last month, buyers are still willing to pay an average of $1,000 above market values for these unit-types.
See more: Changes to the CPF home buying schemes, and what they mean for you