For the 4th quarter of a year in a row, HDB units recorded a price increase, this time of 2.8%. Over the past three quarters, the prices of these units grew slowly yet steadily. Thus, the price increases summed up by the first three months of 2021 got the increase mentioned previously. From one year to another, the overall increase is 8%, which shows the steady interest of homebuyers in these types of units.
Ms. Christine Sun, who is the senior vice-president of research and analytics at Orange Tee & Tie, made a comparison between the peak recorded by HDB units, which took place in the 2nd quarter of 2013, and notices that today’s prices were just 5% lower than that peak. In other words, if the price increases continue in the same manner, the last half of 2021 may bring along a new peak in this sector, one that will subclass the one in 2013.
Still, things didn’t look this way all the time. After the peak in 2013, the prices of HDB units started to decline. This decline took place up to 2019 when the second half of the year started to bring signs of recovery. Also, as Ms. Sun noticed, after taking a look at the info provided by the HDB, 22 HDB cities, out of a total of 26, recorded price increases in the January – March 2021 period. Toa Payoh is in the lead, with an increase of 17% and 244 units. Bukit Timah follows in the second place, recording an increase of 11.2% in 28 units. And, finally, in the third place, we have Bedok, with an increase of 8% in 402 units.
Apart from the increase in prices, the HDB also managed to sell, during this first quarter of the year, units that summed up the value of $53 million. According to Ms. Sun, this year may bring a record in the value of sold units as well, besides the record represented by a peak in price increases. Numbers show that a number of 53 units changed owners in transactions that exceeded $1 million. Since 1990, this is the highest value of transactions for HDB units per quarter.
According to specialists, the increase of prices in HDB units could motivate homeowners that have such flats to put them out for sale, as the opportunity will be one good to be ceased. Once these homeowners sell their flats, they might want to invest in private properties.
Besides this, 25.000 units will reach their 5-year minimum occupation period in 2021, which means that they become eligible for selling if their owners want to. When more HDB units will be released into the market, demand will be stimulated as well. Thus, it is expected to see price increases in these units during this year ranging from 4 to 5%. At the same time, the HDB announced the launch of 8.700 BTOs, of which 3.800 will become available in the month of May.
Because incertitude connected to the Covid-19 pandemic is still present, the HDB will keep a close eye on the real estate market, watching its evolution, supplementing the supply of units if this will be the case.
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