HDB resale transactions fall 1.7% in Q2
Resale prices of HDB flats rose 2.8 per cent from the previous quarter.
SINGAPORE: HDB resale transactions fell by 1.7 per cent in the second quarter of 2022, according to data released by the Housing and Development Board (HDB) on Friday (Jul 22).
There were 6,819 transactions in the second quarter of 2022, compared to the 6,934 cases in the previous quarter.
This third quarter of decline points to signs of the market losing momentum, said Mr Lee Sze Teck, senior director of research at Huttons Asia, adding that it is also the lowest quarterly sales since the circuit breaker period in the second quarter of 2020.
HDB resale prices rose 2.8 per cent from the previous quarter. This is slightly higher than the 2.6 per cent in flash estimates provided by HDB earlier this month.
The resale price index, which provides information on the general price movements in the resale public housing market, was 163.9 in the second quarter, HDB data showed. This is an increase from 159.5 in the previous quarter.
By flat type, four-room units were the most popular, with 2,909 resale applications registered in the second quarter. This was followed by five-room flats with 1,762 applications and three-room flats with 1,558.
Sales volume is still at a healthy level considering prices have increased for many consecutive quarters, said Ms Christine Sun, senior vice president of research and analytics at OrangeTee & Tie.
Authorities have also stepped up the construction of many new flats and shortened the expected completion period of new flats, thus giving buyers more confidence to buy Build-To Order (BTO) flats, she added.
Mr Lee said more buyers are resisting paying higher prices for a resale flat.
"It was observed that there is an increasing number of resale flats whose transacted price matches the valuation price, leading to zero cash over valuation."
The trend of million-dollar flats showed no signs of abating though, making up more than 1 per cent of total resale flat transactions and could exceed 300 this year, said Mr Lee.
He added that there may be more larger flats in non-mature estates breaching the million dollar mark in the months ahead.
In the rental market, the number of approved applications to rent out HDB flats fell by 8.6 per cent, from 10,189 cases in the previous quarter to 9,309 cases in the second quarter.
Compared to the second quarter of 2021, the number of approved applications in the second quarter of 2022 was 15.2 per cent lower, according to HDB data.
As at the end of the second quarter of 2022, there were 56,014 HDB flats rented out, a 0.6 per cent drop over the previous quarter's 56,340 units.
Ms Sun said rental stock may have declined as many homeowners have sold their flats over the past year, resulting in fewer flats on the rental market. Rents may continue to climb on the back of rising inflation and declining stock.
In the second half of the year, interest rate movement and housing supply may play a more significant role in determining the trajectory of flat prices and housing demand, added Ms Sun.
"Higher interest rates will translate to higher borrowing costs, which will moderate demand and price growth. However, since there has been a long run-up in resale prices, a steep price correction may not happen so soon."
As HDB continues to launch more BTO flats in the second half of 2022, the increased supply will continue to draw demand away from the resale market, which may help to regulate the pace of price growth and tame market exuberance, she said.
In August, HDB will offer about 4,900 BTO flats in places such as Ang Mo Kio, Bukit Merah, Choa Chu Kang, Jurong East, Tampines and Woodlands.
About 9,500 BTO flats will be offered in towns and estates such as Bukit Batok, Kallang Whampoa, Queenstown, and Yishun in November.
"This number is subject to review as more project details will be firmed up closer to the launch date," said HDB, adding that it is on track to launch up to 23,000 new flats this year.
"HDB will continue to monitor the housing demand and adjust the plans where necessary," it added.