As Q3 slowly comes to a close and we enter Q4, it is always good to look back to see how the year of resale HDB property prices have fared in the market since we welcomed the new year two quarters ago. And with prices continuing on a gradual downward trend this year, it all reassures the sentiment that 2019 might just be the best year to buy a resale HDB flat.
Gradual Decline of the Resale Price Index (RPI)
Based on HDB’s Resale Price Index, prices declined 0.3% in Q1 and 0.2% in Q2, consistent with the fall in prices that were observed from the third and fourth quarter of 2018.
Wealth of Options in the Market
Experts say that this could be due to the huge supply of relatively cheaper BTO flats (30,000) that have reached their 5-year minimum occupation period (MOP). This number would only increase in a few years with BTO launch exercises to occur every quarter, the most recent launch being the 15,000 flats set to launch under the project names Tampines’ GreenDale and Punggol’s Point Cove and Point Crown.
5-room as the Strongest Flat Type
It is worth noting that not all flat types are experiencing a decline in prices. Interestingly, 5-room HDB resale flats were the best performing in the market with an increased resale price of 0.4% year-on-year (yoy) in 2Q 2019, while 3-room HDB flats fared the worst with a 4.6% yoy decrease, nationwide.
Dip in Median Sale Prices
The median resale prices for flats in mature towns are also seeing a downward trend. The median resale prices for 3-room, 4-room and 5-room flats in Tampines, Bedok, Toa Payoh, and Ang Mo Kio saw a decline in Q2 2019.
Stable Demand for Resale Flats Prevails
Could the decline in prices contribute to the healthy demand for resale flats? The first six months of 2019 saw a total of 11,111 resale flat transactions. This shows a promising 6.8% increase in total resale flat transactions as compared to the first 6 months of 2018.
How the market conditions will fare in Q4 may be a mystery this early on, but it is safe to say that the number of transactions is healthy thus far, with the potential to rise following its current trajectory.
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