SINGAPORE - Housing Board (HDB) resale flats continue to be in demand as prices climbed for the 19th straight month in January, more than one month after property cooling measures were introduced to dampen the red-hot market.
Last month, HDB resale flat prices rose at a quicker pace of 1.1 per cent compared with December's 0.8 per cent, according to flash data from real estate portals 99.co and SRX on Thursday (Feb 10).
Price hikes were seen in both mature and non-mature estates and across all flat types, with prices of four-room units climbing the most at 1.8 per cent.
However, resale volume took a hit in January, edging up by just 0.6 per cent with 2,442 units changing hands compared with December's 2,428.
Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, noted that even though last month's sales volume was 2.4 per cent lower compared with January last year, it was still above the 12-month average of 2,432 units.
Most property analysts expect the HDB resale market to remain resilient despite the cooling measures, as first-time Singaporean home buyers, who form the bedrock of the demand pool, have not been significantly affected by the new property curbs.
Since Dec 16, the total debt servicing ratio for borrowers has been tightened from 60 per cent to 55 per cent, while loan-to-value limits for HDB housing loans have been reduced from 90 per cent to 85 per cent to cool the property market and encourage greater financial prudence.
The additional buyer's stamp duty rates were also raised, although levies for Singaporeans buying their first residential property remain at zero.
Ms Sun said: "As anticipated, the impact of the cooling measures seems to be minimal on the public housing segment. Genuine buyers continued to drive housing demand and those with immediate housing needs proceeded with their purchases."
The average waiting time for Build-To-Order (BTO) flats has risen to between four and five years, after accounting for construction delays brought about by the pandemic.
Before the pandemic, the waiting time for a standard BTO flat was between three and four years.
ERA Realty head of research and consultancy Nicholas Mak noted that the reduced volume last month could have been a result of seasonally slower market activities as Singaporeans prepared for Chinese New Year early this month.
In January, 27 HDB resale flats changed hands for at least $1 million, down from 38 in December.
The 27 units include six in the Queenstown area and four each in Kallang/Whampoa, Bishan and the central area.
The 27 million-dollar flats make up 1.1 per cent of last month's total resale transactions.
The most expensive resale flat last month was a five-room Design, Build and Sell Scheme unit at Natura Loft in Bishan that sold for $1,338,888.
Huttons Asia chief executive Mark Yip said last month's figures show that buyers appear "unmoved" by the promised pipeline of a larger supply of BTO flats as they continue to turn to the HDB resale market for their housing needs.
The HDB has committed to launching up to 23,000 BTO flats each year in 2022 and 2023 to meet the strong demand for public housing. The board said it is prepared to roll out up to 100,000 units from 2021 to 2025, if demand calls for it.
On top of that, around 31,000 HDB flats in towns such as Bukit Batok, Punggol, Sembawang and Woodlands are expected to complete their mandatory five-year minimum occupation period this year.
The high number of units eligible for resale is expected to inject some fresh supply into the market and may result in downward pressure on prices for certain estates, say analysts.
PropNex Realty head of research and content Wong Siew Ying said the recovering job market and economic growth outlook are expected to continue to drive demand for resale flats, although it may be tempered by possible interest rate hikes and rising inflation.
"This may put pressure on HDB resale prices and rein in buying sentiment. We expect overall HDB resale prices to climb at a slower pace of 6 per cent to 8 per cent this year, easing from the 12.7 per cent increase last year," she added.
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