SINGAPORE: Resale prices in the public housing market climbed 3 per cent in the second quarter of 2021 from the previous quarter, according to data from the Housing and Development Board (HDB) on Friday (Jul 23).
The increase was slightly higher than the 2.8 per cent rise in flash estimates released by HDB earlier this month, and represents the fifth consecutive quarter of growth in prices amid the COVID-19 pandemic.
The resale price index for the quarter ended Jun 30 was 146.4, inching closer to the peak of 149.4 in the second quarter of 2013.
The index provides information on the general price movements in the resale public housing market.
Prices currently are about 2 per cent below the peak recorded in the second quarter of 2013, said OrangeTee & Tie's senior vice president of research and analytics Christine Sun.
"After a stunningly successful year of record sales during the pandemic, the HDB resale market set its foot firmer on the gas pedal this year," she added.
"Sales remain largely resilient and prices continue to accelerate amid the stricter restrictions imposed during the heightened alert period."
HDB resale prices are likely to reach a new high by the second half of this year, she added.
Huttons Asia CEO Mark Yip said: "The strong price gains reflect robust demand for flats as buyers shift their focus away from new flats which are experiencing delays in completion."
The number of transactions in the second quarter of this year fell 6.8 per cent from the previous quarter - from 7,581 to 7,063.
This is due to the tightened COVID-19 restrictions which limited viewings, said Huttons Asia's senior director for research Lee Sze Teck.
"Furthermore some sellers' refusal to budge on their asking prices are slowing transactions," he added.
Compared to the second quarter of last year, resale transactions in the second quarter of 2021 were up 106.2 per cent. Singapore underwent a COVID-19 "circuit breaker" between Apr 7, 2020, and Jun 1, 2020, with no home viewings allowed.
STRONG DEMAND, SUPPLY SHORTAGE TO KEEP PRICES UP: ANALYSTS
The strong demand and home supply shortage may keep resale prices elevated in the coming months, said Ms Sun.
Many BTO projects are expected to be delayed as a result of tighter COVID-19 border measures affecting the construction sector.
HDB said in May that the six- to nine-month delay previously communicated could be extended by another three months or more, "depending on how prolonged the situation is, and barring other unforeseen circumstances".
The agency added it was working with various agencies on "mitigating measures to reduce the length of delays".
As the "supply-demand imbalance" may persist this year, Ms Sun said flat prices may be driven higher in the coming months.
"Construction delays are expected for many BTO projects and many young couples with urgent housing needs may continue to turn to the resale market, although the supply lag may begin to ease next year when construction activities continue to pick up," she added.
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In August, HDB will offer about 4,900 Build-to-Order (BTO) flats in Hougang, Jurong East, Kallang Whampoa, Queenstown and Tampines.
This will be followed by about 3,100 to 3,600 BTO flats in November, located in Choa Chu Kang, Hougang, Jurong West, Kallang Whampoa and Tengah.
"As the COVID-19 pandemic is evolving, HDB is monitoring the situation, and will make adjustments where necessary," the agency said on Friday.
After four-and-a-half months of eased COVID-19 measures under the Phase 3 arrangement, Singapore returned to Phase 2 (Heightened Alert) on May 16.
The tightened measures lasted a month and dining-in at restaurants was allowed again on Jun 21 under Phase 3 (Heightened Alert).
Singapore however returned to Phase 2 (Heightened Alert) on Thursday after several clusters linked to KTV lounges and Jurong Fishery Port emerged. The current measures are expected to last until Aug 18.