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Singapore HDB resale volume still "very respectable" despite 16% decline in May: PropNex

Transactions fell from 2,340 in April to 1,966 in May.

The tightening of measures to arrest COVID-19 community cases in May 2021 has had some impact on HDB resale transactions during the month. Estimates released by the SRX showed that HDB resale volume fell by 16% to 1,966 transactions in May from 2,340 units in April. According to PropNex, despite the decline in sales, the number of resale transactions in May 2021, at 1,966 units is still very respectable. On a year-on-year basis, the HDB resale volume in May 2021 surged by 440%, largely due to the low base (364 units) in May 2020, where the circuit breaker disrupted sales activity.

Here's more from Wong Siew Ying, Head of Research and Content, PropNex:

On 4 May 2021, the government announced additional community measures (Phase 3 Heightened Alert) to break the chains of transmission, and the measures were further tightened in mid-May under Phase 2 Heightened Alert, after several clusters of infections and local unlinked community cases emerged. Under Phase 2 Heightened Alert (from 16 May to 13 June), households are permitted to receive up to two unique visitors a day and this restriction has affected property viewings to some extent.

Based on feedback from our real estate agents, it is not uncommon for some sellers to see up to five or eight prospective buyers in a single day, prior to the tightening of measures. Therefore, the latest two-unique-visitors-a-day restriction has severely limited in-person viewing of resale units. To overcome this issue, many agents are tapping digital technology to conduct virtual viewings via Zoom, for example. With the government indicating that Singapore is on track to relaxing restrictions after 13 June – barring an escalation in community cases - we anticipate that HDB resale volume may pick up in the later part of this month as more property viewings resume.

Meanwhile, HDB resale prices rose for 11 consecutive months in May 2021, climbing by 1.2% from April – reflecting increases across all room types, as well as in both mature and non-mature towns. When compared with May 2020, overall HDB resale prices were up by 12% in May 2021, according to SRX. Our market observations suggest that the healthy demand for resale flats will likely continue to support prices; we have seen some locations attracting Cash-Over-Valuation of $20,000 to $30,000 or more amid competition for units.

Looking at the transaction data on the overall average resale price by estates, the majority of towns posted an increase in average resale price from April to May, with Bukit Batok and Bukit Merah enjoying a larger magnitude of price growth. For bigger flats, Toa Payoh and Clementi garnered a higher average price increase in the 4-room flat segment, while the average resale price of 5-room flats rose at a faster clip in Geylang and Bukit Batok compared to other towns from April to May. 

In line with our expectations, the number of HDB resale flats sold for at least $1 million in the first five months of 2021 has smashed the record 82 transactions set in full-year 2020. Thirteen such units were sold in May 2021, taking the total to 87 for the January to May period.

 

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