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HDB resale volume jumps 570% m-o-m in June on 'circuit breaker' easing: SRX
THERE were 2,452 Housing Board (HDB) resale transactions in June, 573.6 per cent more than the 364 last month and 26.7 per cent higher than a year ago, according to flash data released by SRX Property on Thursday.
The HDB resale volume for June was also the highest monthly volume recorded by SRX since July 2018.
By flat type, 40.3 per cent of the HDB resale volume in June 2020 was from the sale of four-room flats, followed by three-room flats (26.3 per cent), five-room flats (24.1 per cent), executive flats (7.4 per cent), and two-room flats (1.9 per cent).
ERA Realty head of research and consultancy Nicholas Mak said pent-up demand accumulated during Singapore's eight-week "circuit-breaker" period, which began on April 7, was behind the surge in transaction volumes.
"During the 'circuit-breaker' period... potential homebuyers and property agents were not allowed to visit and view any properties offered for sale. When buyers were allowed to view properties in June, the result was a sharp increase in transactions," he said.
"It was as if the HDB resale market were on steroids in June."
Mr Mak predicted that the HDB resale volume could stay above 2,100 flats in July, as pent-up demand "continues to work its way through the public housing market".
However, it would "only be a matter of time" before volumes return to a more sustainable monthly figure of between 1,600 and 2,100 flats, he added.
Meanwhile, OrangeTee & Tie head of research and consultancy Christine Sun said the "significant spike" in sales volumes could be attributed more to a backlog of transactions rather than a market recovery.
She pointed out that some resale transactions had been delayed, as certain procedures could not be finalised during the "circuit-breaker" period. Some buyers were also waiting for safe-distancing measures to be eased before inspecting units physically and making a purchase.
"In spite of last month's steep increase in sales volume, the overall sales transactions inked on a quarterly basis are still considered weak when compared to prior quarters," Ms Sun said.
She cited SRX figures that 3,239 resale units were transacted in the second quarter this year, and 5,537 units in the first quarter. These figures are "significantly lower" than the average of 5,871 units per quarter transacted between Q2 2019 and Q1 2020, she said.
As for HDB resale prices, they fell 0.2 per cent month on month in June, but rose 0.8 per cent year on year, SRX said. June prices were 13.2 per cent lower than the April 2013 peak in prices.
Prices of resale flats in non-mature estates dipped 1 per cent month on month in June, while prices of those in mature estates rose 1.1 per cent, the real estate portal said.
By flat type, prices of three-room flats declined 0.4 per cent month on month, while prices of four-room, five-room and executive flats rose 0.4 per cent, 0.6 per cent and 1.6 per cent respectively.
As for year-on-year comparisons, prices of flats in non-mature estates rose 2.1 per cent, while flat prices in mature estates fell 1.2 per cent.
Year on year, resale prices were higher in June than a year ago for four-room (1.9 per cent), five-room (1.2 per cent) and executive flats (0.4 per cent). However, they dropped 1.1 per cent for three-room flats.
In June, there were eight HDB resale flats that transacted for at least S$1 million, SRX said. The highest transacted price for a resale flat in the month was S$1.2 million for a four-room flat at The Pinnacle@Duxton.
Among non-mature estates, the highest transacted price was S$865,000 for a five-room flat at Hougang Street 21.
SRX said the overall median transaction over x-value (TOX) for June was zero, a decrease of S$3,000 from May.
The median TOX measures whether people are overpaying (in the case of a positive TOX) or underpaying (when there is a negative TOX) for flats based on SRX's computer-generated market value. The data includes only districts with more than 10 resale transactions.
SRX said three-room flats registered a zero median TOX in June, while four-room flats logged a positive TOX of S$1,000.
Five-room flats had a negative TOX of S$1,600, while executive flats recorded a negative TOX of S$2,000 .
By district, Bukit Batok posted the highest positive median TOX of S$5,000, followed by Woodlands at S$4,000.
Districts with the lowest TOX were Bukit Merah at a negative TOX of S$8,800, followed by Pasir Ris and Jurong West at negative TOX of S$5,000 each.
Mr Mak said the "slight" dip in resale prices in June compared to May indicated that many sellers were "realistic about the current market conditions" and did not increase the prices of their flats significantly.
He added that prices could remain range-bound for the rest of the year, with a slight upward bias, but their growth would be limited by expectations of a weak economy and job market.
Mr Mak also pointed out that an estimated 26,000 HDB flats - a "significantly large" number - will reach the end of their minimum occupancy period this year, which would make them eligible to be sold on the resale market.
These relatively new flats usually command higher prices than older flats in the same neighbourhood. As a result, they will contribute to the buoyancy of the HDB resale price index, he added.
Ms Sun said that the HDB resale market could continue to improve in the coming months, if the Covid-19 pandemic remains under control in Singapore and the macroeconomy does not deteriorate drastically.