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HDB resale prices plateau in February, ending 31-month rally: SRX,

SINGAPORE - Prices of Housing Board resale flats in February held steady for the first time following a 31-month climb, but property analysts cautioned that this should not be viewed as a sign the market is cooling just yet.

Flash data released by real estate portals and SRX on Thursday also showed that fewer HDB resale flats changed hands in February, with sales down by 28.2 per cent to an estimated 1,849 units from 2,575 units in January.

Prices of resale flats in both mature and non-mature estates dipped marginally by 0.1 per cent in February, with prices of four-room flats – the most commonly transacted flat type – staying flat compared with the month before.

Overall, prices were up 8.3 per cent year on year.

At least five property analysts said the flat price movement and decline in transactions in February are likely a knock-on effect from the fewer viewings and slower sales activities in January due to the Chinese New Year festivities.

Most expect prices to remain relatively stable and sales volume to pick up from March.

OrangeTee & Tie senior vice-president of research and analytics Christine Sun said the unchanged prices and fall in volume could also be seasonal, as sales in February – the shortest month – had similarly dipped from 2019 to 2022.

PropNex Realty head of research and content Wong Siew Ying said some property agents in her firm observed that while overall demand remains fairly stable, some potential buyers have become more cautious amid market uncertainties.

“Buyers’ price resistance remains high, which could have put some pressure on the HDB resale volume in February,” she said. 

But agents are receiving more inquiries about three-room and four-room HDB resale flats, she added, following the boost in the CPF Housing Grant for resale flats announced in Budget 2023. Buyers of four-room and smaller flat types receive the most in grants – up to $80,000, from $50,000 before.

ERA Realty head of research and consultancy Nicholas Mak said the slowdown in February is temporary, and market activity will “resume shortly” once stricter rules on not selecting Build-To-Order (BTO) units take effect in August.

BTO buyers who do not want to risk their first-timer priority status or have their first-timer privileges suspended could turn to HDB resale flats instead, thus propping up the resale market, said Mr Mak.

From the August BTO launch, first-timer applicants will be moved to the second-timer category once they decline to book a flat. Currently, they will be considered second-timers only if they do not book a flat when invited to do so twice.

In the longer term, the ramp-up in BTO flat supply in the coming years could draw some potential buyers back to the BTO market – especially those who can wait for a unit, said Mr Mak. The draw will be even stronger once the waiting time for BTO flats shortens to the pre-pandemic norm of three to four years, from the current four to five years, he added.

But for now, HDB resale flats will still be in demand as it takes time for the increased supply of BTO flats to kick in, said Mr Mak, who predicted that 26,000 to 28,000 HDB resale flats could be sold in 2023. In 2022, 27,896 flats changed hands.

The number of HDB resale flats that sold for at least $1 million dropped to 24 units in February, from the 40 units in January.

The 24 million-dollar units comprise 1.3 per cent of the total resale volume in February.

One Global Group senior analyst Mohan Sandrasegeran said there is still demand for larger flats in attractive areas despite cooling measures to curb rising prices and prevent speculative buying. Buyers will continue to shell out for million-dollar flats but the number will grow at a slower pace, he said.

Among the million-dollar flats sold in February, there were five in Toa Payoh, four in Queenstown and three each in Woodlands and the central area.

The most expensive resale flat was a five-room 105 sq m unit between the 22nd and 24th storeys at The Pinnacle@Duxton in 1E Cantonment Road that sold for $1.34 million. It had 87 years left on its 99-year lease.

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