There are 758 units in Queenstown that will be up for resale as their minimum occupation period expires soon.
The demand for upscale HDB resale flats is as high as ever after with 8.5% of resale flats transacted at over $700,000 in 2018. This is a record-high since 1990. These flats ate up 15.6% of the total resale transaction value.
Moreover, a record number of 71 flats were sold at more than $1m last year. “Although they constitute only 0.3% of all HDB resale transactions last year, there seems to be a consistent uptrend in demand for such flats,” a report by OrangeeTee & Tie said. Twenty million-dollar flats were transacted in Q4 2018 despite the typical year-end marketing slowdown.
Also read: Million dollar HDB resale flats on the rise
Notably, the third priciest flat on record was also transacted in October 2018 at $1,168,000 for a 106 sqm 5-room flat at Duxton at Pinnacle. A 112 sqm 5-room standard flat at Boon Tiong Road and a 114 sqm 5-room Design, Build and Sell Scheme (DBSS) at Toa Payoh were sold for $1.15m in December. Sixteen standard flats were sold at over $1m last year, mostly at Boon Tiong Road (seven flats), Commonwealth Drive (three flats), and Holland area (three flats).
According to OrangeTee & Tie managing director Steven Tan, more million-dollar transactions could be expected as about 3,500 and 4,000 BTO flats would be reaching their five-year minimum occupation period (MOP) this year.
The uptrend in demand is poised to continue this year as more HDB flats in prime locations like Queenstown (758 units), Bukit Merah (2,966 units), and Ang Mo Kio (256 units) are reaching their five-year MOP and can be put up for resale.
“The increasing number of HDB flats being sold at higher prices indicates that selected market segments or flat models are still performing well, Tan said. Of the 1,836 flats transacted over $700,000, 52.1% (956 units) were standard flats, including improved, model A, multi-generation, new generation and standard models; whilst the rest were non-standard flats, including DBSS, Premium Apartments, Maisonettes, Apartments, and Type S1/S2. Almost half, or 47.2%, were more than 20 years old already.
Prices fell across most towns for 3-room flats (except Bukit Timah, Geylang and Tampines) whilst they rose for half the mature towns for 5-room flats YoY in 2018. OrangeTee & Tie noted that the price movement was more marginal for 4-room flats, fluctuating within a - 3% to 3% price change for most of the towns.
Despite the big supply of HDB flats in Punggol, the 4 and 5-room flats in the town saw the largest YoY price increase in 2018 of 3% and 7% respectively.
As the outlook for Singapore's property market continues to dim in 2019, the increased number of HDB resale flats last year could be a silver lining for the market, Tan said. “Demand for HDB resale flats may continue to be resilient this year and maybe supply-led as more than 26,000 HDB flats are reaching MOP this year and will be eligible for resale. These flats will also be eligible for rental, thus possibly uplifting the HDB resale market,” he added.
Moreover, areas like Punggol, Sengkang, Yishun, Bukit Merah, Pasir Ris, and Tampines could see more resale and rental activities this year. “Further, as many new condominiums in Punggol and Sengkang are reaching their fourth year after their OTP (option to purchase) date, where many sellers will no longer be subjected to the seller’s stamp duties, more condominium units could be put up for resale which may spur some HDB owners in these areas to sell their flats for upgrading,” Tan said.
Meanwhile, price weakness could continue to affect some market segments, especially smaller and older flats due to the lease decay issue and growing supply of newer HDB resale flats in non-mature estates.
Consequently, resale prices and rents may experience some downward pressure in selected towns. “We estimate that the island-wide resale price may continue to fall but at a slower pace of between 1-2%, whilst rents may dip by 1-3% for the whole of this year,” Tan concluded.
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