HDB resale prices climb for the 12th straight month in June

HDB prices record a 0.9% uptick in June from May.

Housing Development Board (HDB) prices continued their rising streak, climbing by 0.9% in June, month-on-month (MoM), according to the latest SRX data. This marked one full year of price increases.

Prices in mature and non-mature estates rose by 0.4% and 1.2%, respectively, compared to May 2021. Based on room types, 3 Room, 4 Room, 5 Room, and Executive prices increased by 0.5%, 1.1%, 0.4%, and 1.0%, respectively.

Year-on-year (YoY), the overall price increase was at 13.2%, still lower than the 1.7% peak reached in April 2013. All room types posting price increases: 14.8% for 3 Room, 12.0% for 4 Room, 11.6% for 5 Room, and 12.3% for Executive. Mature and non-mature estate prices increased by 10.9% and 14.9%, respectively, compared to the previous year.

Resale transactions increased by 17.5% MoM, with 2,311 units changing hands. YoY, resale volumes in June 2021 was 5.8% lower.

Broken down, 987 of the transacted units were 4 Room, 624 were 5 Room, 476 were 3 Room, and 191 were Executive. The rest were 1 Room, 2 Room, and Multi-Gen flats.

In June, 19 flats were transacted for at least $1m, higher than the 13 sold for similar prices in May, and making a total of 106 HDB flats sold for that price for the first half (H1) of 2021. This is a 341.7% increase from the same period last year.

The highest transacted price for a resale flat was $1.26m for a 3 Room Terrace unit at Jalan Bahagia.

PropNex Head of Research and Content Wong Siew Ying said larger flats have seen a steeper pace in growth as more buyers prefer more spacious homes to accommodate working and/or schooling from home.

The number of 5-room flats resold in 1H 2021 was 70% higher than that of H1 2020, while the resale volume of executive flats jumped by about 67% to 1,063 units over the same period,” Wong said.

He noted that the 106 HDB flats that sold for more than $1m were all mature estates, located primarily in the Central Area, and close to a broader range of amenities.

Senior Vice President of Research & Analytics for OrangeTee Christine Sun said sales were still below the 12-month average of 2,377 units from June 2020 to May 2021, due to the first half of June 2021 falling within the Heightened Alert period.

She flagged cash-over-valuation (COV) as a possible concern for buyers.

The authorities have recently clarified that the majority of buyers did not have to pay any COV for their flats and the median COV each year has remained at $0. Although the proportion of buyers who paid COV increased this year, it is still significantly lower when compared to the period between 2010 and 2013,” Sun said.

COV happens when the resale price is higher than the market valuation of a unit, with a difference that can only be paid by cash.

The Ministry of National Development, in a written answer penned 5 July, said one in three buyers paid COV in 2021, higher than the one in five in 2020.

This reflects the current broad-based demand for housing, including in the private housing market, supported by the low-interest-rate environment. Notwithstanding this, the majority of buyers did not have to pay any COV, and the median COV each year has remained at $0,” the Ministry said.

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