SINGAPORE – The Housing Board (HDB) resale market remained strong despite macroeconomic uncertainties caused by the Covid-19 pandemic and an increasing supply of flats.

HDB resale prices rose 2.9 per cent in the fourth quarter of 2020 cent from the previous three months, according to the latest HDB flash estimates released on Monday (Jan 4).

It is the third consecutive quarter of increase and the biggest quarterly increase in over nine years, where the last high recorded was the third quarter of 2011 when HDB resale prices climbed 3.8 per cent over three months.

The fourth quarter of 2020 also recorded the steepest year-on-year increase in HDB resale prices since the third quarter of 2013, which saw a  6.5 per cent jump.

For the whole of 2020, resale prices rose 4.8 per cent, higher than the 0.1 per cent growth in 2019 and the 0.9 per cent decline in 2018.

The final figures, with more detailed public housing data, will be released on January 22.

OrangeTee and Tie’s head of research and consultancy Christine Sun said that HDB resale market recovery can be attributed to the slew of policy changes made over the past two years to make public housing more affordable and enhance the attractiveness of older flats.

This includes allowing buyers greater flexibility in using their Central Provident Fund (CPF) to buy older flats and the introduction of the Enhanced CPF Housing Grant (EHG) for eligible buyers, which has a raised income ceiling and simplified grant structure.

“Many new flats which command higher prices have also been transacted over the past few months, which may have ‘uplifted’ the overall price index in the last quarter,” said Ms Sun.

A record 72 HDB resale flats were sold for over $1 million in the first 11 months of 2020. It exceeded the previous full-year record of 71 units transacted in 2018 and 64 units in 2019.

This include a HDB resale flat at Pinnacle @ Duxton that was sold for a record price of $1.258 million in September last year.

Ms Sun expects the prices of HDB resale flats to rise another 2 to 5 per cent this year as the Singapore economy gradually recovers in the second half of 2021.

“Couples who are still doing well in their jobs may proceed with their upgrading plans, while those who are still affected by the pandemic may downgrade from private housing to HDB flats. This may result in more flats being put on the market as well as more flats changing hands in the coming months,” she said.

The long completion period for recent Build-To-Order (BTO) launches and rising private home prices may also divert some demand to the HDB resale market, she added.

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