SINGAPORE: The resale prices and transactions both fell in the third quarter of this year, according to the latest figures from the Housing and Development Board (HDB) on Friday (Oct 27).
The Resale Price Index fell by 0.7 per cent from the previous quarter, from 133.7 to 132.8 in the third quarter, HDB figures showed. Resale transactions also dropped by 3.2 per cent from 6,001 in the second quarter to 5,808 in the latest quarter, it added.
As for the HDB rental market, the agency said the number of applications approved for subletting of flats fell by 2.1 per cent - from 10,929 cases in the previous quarter to 10,698 in the third quarter. As at Sep 30, there were 53,445 flats being sublet, a decrease of 0.2 per cent over the previous quarter.
HDB also said it will offer about 4,800 Build-To-Order flats in Geylang, Punggol, Sengkang and Tampines in the November BTO exercise, and this will bring the total new flats supply for the year to about 17,500 units. There will also be a concurrent Sale of Balance Flats exercise, it added.
DOWNTURN EXPECTED TO BE "SHORT-LIVED"
Analysing the latest data, real estate agency ERA Realty Network said resale prices have decreased by 1.3 per cent for the first three quarters of 2017.
"This comes as a surprise, given that HDB announced enhancements to its resale grants earlier in March this year," it said in its press release on Friday. "However, given the recent exuberance in the private residential market, any downturn in the HDB resale market, if any, is expected to be short-lived."
It added that there could be additional demand flowing into the resale HDB market in about four to six months' time as it expects some owners of private collective sale units - especially retirees - to buy resale HDB flats as replacement units when they receive their sales proceeds.
However, over the next three months, ERA Realty Network said resale HDB prices may continue on a "very moderate decline" as demand may see a slight slowdown over the year-end holiday season.
As for resale transactions, ERA Realty Network said the new Re-Offer of Balance Flats scheme and the shorter waiting time for Build-To-Order flats could have diverted some demand away from the resale market.
"With HDB introducing the new resale portal in January 2018, it is expected that resale flats could be even more attractive to buyers, as there will be a clearer and more concise administrative procedure coupled with a more efficient timeline to complete the sale and purchase," the agency added.
It expects total resale transactions for 2017 to range between 21,000 to 22,000 units, a moderate increase over 2016’s 20,813 units transacted.
"MORE OPTIONS" AVAILABLE IN PRIVATE PROPERTY MARKET
As for the HDB rental market, ERA said that demand for HDB flats has fallen due to "more options being available" in the private property market.
"Due to the oversupply of rentable private property units, landlords have been cutting rents, and those that previously rent HDB flats find that they can now afford to rent private condominium units," the agency said.
However, it added that HDB flats are still an "attractive option" especially for those who have lower budgets, and said that as private residential rents continue to decline, HDB landlords also have to lower their rents to remain competitive.
"However, as the private residential rental market starts recovering, so will the HDB rental market," it said.
It added that this is expected to happen late next year or in 2019.
ERA said it expects rental transactions for 2017 to range from 41,000 to 43,000, a decline from the 44,530 units that were rented out in 2016.