Singapore, 01 Jan 2020 Overview of price trend
According to HDB flash estimates, HDB resale prices rose by 0.4 per cent in the fourth quarter of this year, when compared to the 0.1 per cent increase in the previous quarter. This is the second uptick since Q2 2018, and the largest quarterly increase since Q2 2013 (0.5 per cent). For the whole of 2019, there was no change in resale flat prices, indicating that prices of resale flats have stabilized further after a series of policy changes have been implemented in recent months.
Impact of policy changes
The various policies seemed to have achieved their goals in improving the demand of different flat types and mitigating further price falls that were mainly caused by the lease depreciation of older flats and an increasing supply of HDB flats. For instance, the policy change that allows buyers to use more Central Provident Fund monies to buy HDB flats and the ongoing HIP (Home Improvement Programme) seemed to have improved the attractiveness and demand for older flats. In the second and third quarters of last year, the sales volume of older flats increased islandwide while the prices of older flats rose in certain towns.
Enhancing the housing grants for first-time buyers and raising the income ceiling for eligible buyers seemed to have expanded the pool of potential buyers in the market. We have observed more inquiries on the ground while sales transactions have also increased based on HDB caveat records downloaded from data.gov.sg which have shown more resale flats being transacted in the first eleven months of 2019 (20,353 units) when compared to the same period in 2017 (18,776 units) and 2018 (20,139 units).
Outlook for 2020
We remain positive about the HDB resale market for 2020 as the policy changes will likely continue to impact the resale market positively in the months to come. The HDB resale market looks set to ring in another busy year as more flats will be reaching MOP and more housing demand could be expected after the policy changes.
We anticipate that between 21,500 to 22,000 HDB flats may be sold for the whole of 2019, while the overall sales volume may come in higher at 23,000 to 24,000 this year. We anticipate that prices may grow further possibly between 0 to 2 per cent for the whole of 2020.