Singapore’s HDB resales slide in August

A combination of affordable prices and CPF changes keep resale flats in resilient demand

The resale volume of public housing in Singapore stood at just 1,921 units in August, a drop of 9.4 percent month-on-month and 7.6 percent from a year ago.

The sales volume decline may be attributed to the seasonal effect of the lunar year’s seventh month, a traditionally slow period for transactions, according to Christine Sun, head of research and consultancy at OrangeTee & Tie Pte Ltd.

The sales decline is “not as significant” as last year though. “Sales volume dipped by a bigger magnitude of 18.5 percent [on the month] in August 2018, possibly due to the weaker buying sentiment after the property cooling measures were implemented in July 2018.”

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Last month’s resale volume eclipses the 12-month average of 1,830 units between August 2018 to July 2019—indicating a resilience in demand for resale flats, the consultancy noted.

Prices of resale units, which slid 0.6 percent year-on-year last month, have galvanised buying. “Resale flats remain an attractive housing option for buyers given their price affordability,” said Sun.

“We may expect resale prices to remain soft as competition is likely to stiffen further with more flats reaching their MOP in the coming months,” she added, referring to the mandatory five-year minimum occupation period (MOP) of resale flats.

Demand for older flats has increased due to recent Central Provident Fund (CPF) changes allowing buyers to use more of their social security funds and take out bigger HDB loans for ageing units, Sun noted. Around 564 flats older than 40 years were transacted from May to June, compared with 403 in the same period last year.