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HDB resale and rental volumes down, prices stagnant amid Covid-19 outbreak

[SINGAPORE] Resale and rental volumes of Housing Board (HDB) flats fell in the first quarter of 2020 amid the ongoing coronavirus outbreak.

Data provided by the HDB on Friday showed that resale flat transactions fell from 6,339 in the last quarter of 2019 to 5,893 in the first three months this year, representing a 7 per cent drop.

Fewer three-room, four-room, five-room and executive resale flats were sold, but one-room and two-room flats saw small increases.

The first-quarter volume, however, is still 21.9 per cent higher compared with the first quarter last year.

Meanwhile, prices of resale flats remained stagnant.

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HDB data showed that five-room flats in Queenstown recorded the highest median resale price at S$852,500, followed by Bukit Merah at S$817,500 and Clementi at S$815,000. 

Christine Sun, head of research and consultancy at Orange Tee & Tie, said the decline in resale volume could be an impact of the circuit breaker measures, with house viewings discontinued. Buying sentiment may also have weakened due to the economic uncertainties brought about by the pandemic. 

But prices of resale flats held steady, she pointed out, continuing the trend in the past five years where price changes have been within a narrow band of between minus 1 per cent and 1 per cent. 

ERA Realty head of research and consultancy Nicholas Mak noted that the property market was still positive in the first two months of the year, but the rapid and unexpected global spread of Covid-19 in March wiped out earlier gains. 

Latest figures also show that HDB approved 4 per cent fewer applications to rent out flats in the first quarter of the year - 11,591 cases compared with 12,079 in the previous quarter - a decrease which both realtors attributed to the pandemic.

Ms Sun said: “Some could be staying in their own flats in the light of the circuit breaker measures, while others may choose to lease their flats only after the pandemic subsides so as to avoid a potential virus spread in their units.” 

Mr Mak agreed, observing that rental transactions failed to increase despite the Malaysian lockdown that left many Malaysians working or studying here rushing to find accommodation. 

His forecast for the second quarter was grim. 

“We can almost write off the second quarter due to the eight-week circuit breaker period. The HDB resale volume in the second quarter could drop to less than half of the volume in Q1 2020,” he said. “However, it could bounce back once the circuit breaker period is lifted.”

Ms Sun is optimistic about the HDB resale market picking up after the outbreak.

Genuine buyers and those with urgent housing needs may return to the market when flat viewings resume after containment measures are eased, she said. 

“The price affordability of HDB flats may be deemed attractive to some buyers, especially those who prefer a cheaper housing option or a smaller housing loan in the light of the current economic uncertainties.”

HDB said that sales launches scheduled in May have been deferred until further notice because of the ongoing circuit breaker measures that have led to the closure of most non-essential workplaces.

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