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HDB resale volume in July highest in two years

[SINGAPORE] The number of Housing Board (HDB) flat resale transactions continued to remain high in July with prices creeping up, according to flash data released by real estate portal SRX Property on Thursday.

An estimated 2,470 HDB resale flats were sold last month, a 0.7 per cent increase from June when 2,453 units were sold.

July's sales estimates are the highest monthly sales in two years since July 2018, when 2,553 units were transacted.

The two months of high sales came after exceptionally low numbers of 423 and 364 flats sold in April and May respectively, during the "circuit-breaker" period that lasted from April 7 to June 1.

The latest estimates showed HDB resale prices had increased 0.4 per cent in July 2020 compared with June 2020, with the resale price index at 132.9 in July, up from 132.3 in June.

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Property analysts said that despite the bleak economic outlook, the HDB resale market will likely weather the pandemic.

Nicholas Mak, ERA Realty's head of research and consultancy, said: "Some home buyers prefer to purchase HDB flats during periods of economic uncertainties as they remain the most affordable housing."

He predicted that the resale price index is likely to rise gradually, and estimated that there would be an increase of between 0.6 per cent and 1.2 per cent by the end of this year.

Mr Mak said the increase in resale prices from June to July could be attributed partly to an increase in the transactions of newer HDB flats, with many reaching the end of their five-year minimum occupation period.

These flats usually command a higher price than the older flats in the same neighbourhood, he added.

Wong Siew Ying, head of research and content at PropNex, said: "The strong resale volume in July would likely put to rest any doubts that June's sales spike was a blip caused by pent-up demand owing to the lockdown in April and May.

"We believe such demand for resale flats could be sustained and are projecting overall HDB resale volume to come in at 21,000 to 22,000 flats for the full-year 2020 - slightly lower than the 23,714 units resold in 2019."

She added that the fact that HDB prices held up in recent quarters - amid the pandemic - also reflects the strength of the HDB resale market, where sellers still have sufficient financial holding power and are generally able to maintain their asking prices.

Christine Sun, head of research and consultancy at OrangeTee & Tie, attributed the high sales volume to a backlog of transactions that were accumulated during the "circuit-breaker" period, adding that during the current economic slowdown, HDB resale numbers could remain high as buyers could be looking for more affordable homes.

The estimated number of resale flats sold last month was also 15 per cent higher than that of July last year, when 2,147 transactions were made.

Four-room units were the most popular, making up 40.1 per cent of the flats sold, followed by three-room flats at 25.1 per cent and five-room flats at 24.3 per cent.

Executive units made up 7.8 per cent, while the rest were two-room flats.

Looking forward, Ms Sun said: "Given that the HDB resale market has not been heavily battered by the pandemic, the road to recovery may not be a lengthy one."

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