SINGAPORE - The resale prices of HDB flats in mature estates fell 0.2 per cent on the month in August, while million-dollar flat sales declined amid a lull due to the Hungry Ghost Month.

Overall resale prices posted a 0.5 per cent month-on-month increase, as prices continued to rise 1.2 per cent in non-mature estates, indicated flash estimates from SRX and 99.co released on Sept 4. This marks a 7.5 per cent year-on-year increase for overall HDB resale prices.

The smaller increase could be due to more flats being sold without a cash over valuation, chief executive officer of Huttons Asia Mark Yip said.

Sales volume fell in August, as the Hungry Ghost Month kept buyers at bay. It fell 14.6 per cent to 2,605 units in August, from 3,049 flats in the previous month. Despite this, August resale volume was 5.3 per cent higher on the year.

The seventh lunar month, which started on Aug 4, is known as the Hungry Ghost Month and considered inauspicious for property purchases. Home buyers could have postponed their purchases as a result, noted OrangeTee Group chief researcher and strategist Christine Sun.

The number of million-dollar flat sales made up 4 per cent of the total resale volume in August, with 104 units sold. This marks a decrease from the 120 million-dollar flats transacted in July.

In August, Bukit Merah recorded 12 million-dollar flat sales. Bishan and Kallang/Whampoa followed, with 11 such transactions each. Ang Mo Kio sold 10 such units.

Resale prices across room types were mixed. Prices for three-room flats and five-room flats each edged up 0.8 per cent on the month, while executive-flat prices rose 1 per cent for the same period.

Meanwhile, four-room prices recorded a 0.2 per cent month-on-month decrease.

By room type, four-room flats were the most popular in August, accounting for 43.4 per cent of total volume.

More than half (60.5 per cent) of resale flat transactions were from non-mature estates.

Both mature and non-mature estate prices posted a year-on-year increase of 6.3 per cent and 8.2 per cent, respectively.

Three-room flats had the highest year-on-year increase in resale prices at 8 per cent. This was followed by four-room flats at 7.5 per cent, five-room flats at 6.8 per cent and executive flats at 5.7 per cent.

Market watchers agree that recent cooling measures had limited impact on August’s resale market. However, they noted that the effects of the restrictions could be more clearly observed later in the year.

Mr Mohan Sandrasegeran, head of research and analytics at Singapore Realtors, said it takes about eight weeks to process and complete a resale application. Market data in October and November this year will start to reflect August’s finalised deals.

In August, the Ministry of National Development announced new restrictions on HDB loans for flat buyers to cool the public housing resale market.

The loan-to-value (LTV) ratio for HDB loans was lowered to 75 per cent from 80 per cent for completed resale applications received by HDB on or after Aug 20, and to Build-To-Order applications from the October 2024 exercise onwards. 

Ms Wong Shanting, ERA Singapore’s head of research and market intelligence, said: “This may lead to a marginal decline in transaction volume in the coming months. The change is likely to affect buyers who had intended to maximise their leverage.”

Buyers, who need to consider a higher cash outlay and are shrinking their housing budgets, might take longer to rework their finances. However, this is unlikely to affect the market significantly, Ms Wong noted.

The highest transacted price for a resale flat was $1.48 million for a five-room unit in Cantonment Road.

In non-mature estates, the most expensive flat resold was a five-room apartment in Punggol Field, which fetched about $1.22 million.

Still, analysts disagree on how the cooling measures will affect the volume of million-dollar transactions in the resale market.

Ms Sun said: “Million-dollar transactions may not experience a big impact, as many buyers may not be taking HDB loans. Some may have deep pockets and are not affected by the drop in LTV.”

However, PropNex head of research and content Wong Siew Ying noted that the tightening of the LTV limit could crimp the sales of pricey resale flats at the top end of the market, with buyers having to fork out the difference.

There could be a slight pullback in million-dollar resale transactions in the near term, as prospective buyers weigh their options and review their sums, she added.

Demand for HDB resale flats in 2024 is expected to remain strong, Mr Yip noted.

With a tight supply of five-room and larger flats in Singapore’s central region, buyers might be left with little choice but to fork out at least a million dollars, he said. THE BUSINESS TIMES