Resale prices for HDB flats increased by 1.5% in Q3 2020, following an increase of 0.3% in the previous quarter. This is the highest percentage increase in HDB resale prices since Q4 2012, when prices increased by 2.5% in a single quarter.
The recent experience of the COVID-19 Circuit Breaker accelerated many first time buyers’ decisions to take the plunge to buy their own home. There is a need for their own space or a bigger space as some have to work from home for an extended period of time. Permanent Residents especially Malaysians who make the daily commute to Singapore will prefer to have a residence here in the event of unforeseen circumstances such as this pandemic. Hence many affordable flats especially below $400,000 are snapped up very quickly after the easing of Circuit Breaker and we also see the return of Cash Over Valuation (COV).
The shortage in supply of resale HDB is also exacerbated by the delay in BTO construction as first-timers may find the waiting time too long and they can also take advantage of the generous CPF housing grants. Whether this is sustainable in the long term will depend on how quickly the construction of BTO projects return to pre-COVID times.