HDB resale prices rose 0.5 per cent in July, lowest monthly rise in 12 months: SRX data

• Resale HDB prices rose 0.5 per cent in July month-on-month, after a 0.9 per cent increase in June
• It was the lowest rise since July 2020 when prices rose 0.4 per cent
• The number of resale flats changing hands in July jumped 15.2 per cent from June

SINGAPORE — The resale prices of Housing and Development Board (HDB) flats rose 0.5 per cent in July this year compared to June, the lowest monthly increase in 12 months, flash data from property portal SRX showed.

Compared to July 2020, HDB resale prices had risen 13.2 per cent last month.

The 0.5 per cent month-on-month price rise of resale flats follows a 0.9 per cent increase in June, the data released on Thursday (Aug 5) showed.

This was the lowest since July last year when they rose 0.4 per cent. In January, for example, prices jumped 1.8 per cent.

The number of HDB resale transactions surged 15.2 per cent to 2,662 in July compared to June. On a year-on-year basis, resale volume was 7.8 per cent higher.

There were 19 HDB resale flats that sold for above S$1 million, the same number as the month before.

This made up 0.7 per cent of the total number of HDB resale transactions.

The highest transacted price for July was S$1.23 million for a five-room flat at The Pinnacle@Duxton in Tanjong Pagar.

Ms Christine Sun, senior vice-president of research and analytics at property agency OrangeTee & Tie, said July’s data showed that the tightening safe distancing measures, implemented when Singapore returned to Phase Two (heightened alert), did not put a dent on the demand for HDB resale flats.

Analysts interviewed by TODAY said that the driver for demand continues to be construction delays plaguing public housing projects, in tandem with a lack of foreign manpower due to border restrictions imposed to curb the spread of Covid-19.

Despite the somewhat smaller increase in July, some analysts estimated a full-year increase in resale prices of at least 8 per cent.

Mr Nicholas Mak, head of research and consultancy at real estate agency ERA, said that prices may even increase by up to 12 per cent for the whole of 2021.

The last time HDB resale prices grew at such a rate was between 2010 and 2011, when the economy was recovering from the global financial crisis in 2009.

Mr Mak said that upward pressure on HDB resale prices would persist until the construction supply chain is restored to some level of normalcy.

He added that another 26,000 of new HDB resale flats will enter the market as they reach the end of their five-year minimum occupation period this year.

However, Mr Lee Sze Teck, senior director of research at real estate firm Huttons, noted that the pace of price gains has slowed for the second month, possibly due to price resistance from buyers.

Independent property analyst Ong Kah Seng said that cooling measures targeted at the HDB resale market may be needed by the end of this year to rein in market exuberance.

He added that there are heightened risks of buyer’s remorse arising from buyers trying to outbid rival property-hunters in a price war and realising that they paid too much.

Mr Ong also said that it would be timely for the Government to consider reintroducing the Design, Build and Sell Scheme (DBSS), which refers to public housing flats built by private developers.

DBSS was suspended in 2011 after public outcry over high price tags for units at a DBSS project in Tampines called Centrale 8.

Given the growing number of million-dollar HDB flats, some of which were DBSS flats, Mr Ong said that there will be strong demand for centrally located flats in lifestyle-driven public housing projects.