Nearly 6,400 resale flats sold in Q1, lowest volume in 5 years

Key Concepts:

• Resale flat market slowdown
• Built-to-Order (BTO) flats
• Private property market moderation
• Outside Central Region (OCR) property sales
• Domestic buyer influence

Resale Flat Market Trends

• Sales Volume Decline: Resale flat transactions have hit a five-year low, with approximately 6,400 units sold in the first quarter of the year. This represents a 7.7% decrease compared to the nearly 7,000 units sold during the same period last year.
• Price Increase Moderation: While resale flat prices did increase by 1.5%, this growth was lower than the 2.6% increase observed in the previous quarter.
• Ministry of National Development (MND) Explanation: The MND attributes the easing of prices to the consistent supply of BTO flats.
• Impact of BTO Supply: The February launch of approximately 5,500 BTO flats, coupled with the Sale of Balance Flats (SBF) exercise, influenced some buyers to shift away from the resale market, contributing to the price moderation.
• Market Outlook: Market analysts anticipate moderate price growth in the resale market in the coming months.
• Future BTO Supply: The number of flats reaching their Minimum Occupation Period (MOP) in 2025 is expected to be low, potentially increasing demand and prices. This could involve approximately 1,000 units.

Private Property Market Trends

• Price Growth Moderation: Home prices in the private property market have also moderated, growing by 0.6% in the first quarter, down from 2.3% in the previous quarter.
• Regional Sales Impact: Analysts attribute the smaller price increases to a higher volume of properties sold outside the central region. These units are typically priced lower than those in the central or city fringe regions.
• Sales Volume Decline: The number of private homes sold also decreased by 15% on a quarterly basis.
• Buyer Preferences: Market observers suggest that buyers may be prioritizing the supply of public housing flats.
• Outside Central Region (OCR) Sales Increase: Home sales outside the central region increased to nearly 60% in the first quarter, up from 47.6% previously.
• Market Stability: Analysts predict that private property demand should remain stable, with domestic buyers playing a significant role in supporting the market.
• Economic Factors: Continued stable income growth and a robust job market are expected to contribute to favorable consumer confidence and spending, which could positively impact the private residential market.

Conclusion

Both the resale flat and private property markets are experiencing a moderation in price growth. The increased supply of BTO flats is influencing the resale market, while a shift in sales towards properties outside the central region is impacting the private property market. Domestic buyers are expected to continue playing a crucial role in maintaining market stability. Favorable economic conditions, such as stable income growth and a robust job market, are also anticipated to support the residential market.