The momentum in the HDB resale market, which had started building up last year, shows no sign of letting up. The first quarter of 2021 recorded a 3% surge in HDB resale prices— the fourth consecutive quarter in which the price index for the HDB resale market increased.
While the number of HDB resale flats that changed hands in the first quarter of the year had fallen marginally from the previous quarter, the high demand has continued to drive high prices. Home buyers are also increasingly willing to pay at least a million dollars for HDB resale flats, with 21 of such transactions taking place in April. This has also led to cash over valuation (COV) making a comeback in the property market, as homebuyers seek to secure their HDB flats.
Why are homebuyers leaning towards HDB resales? The trend certainly cannot be viewed in isolation from the impact of the Covid-19 pandemic.
Not only is the low supply of BTO flats disproportionate to the great competition among bidders, but the waiting time for the completion of BTO flats is also prolonged by delays to the construction process. With Covid-19 measures limiting the manpower for the projects, homebuyers can expect a longer waiting time to receive the keys to their new HDB flat.
As Singapore grapples with the second wave of Covid-19, homebuyers are likely to be inclined towards taking up HDB resale homes, instead of waiting for an extended length of time, to obtain their keys. With private property prices not budging in the face of the pandemic, the HDB resale flats remain a more affordable option. But what does this mean for you?
HDB resale prices hitting a new high due to construction delays, presents a good opportunity to cash out your property in this seller’s market, and upgrade to a private property. As HDB resale prices may not always be this high, selling your HDB now would bring you greater profits. Furthermore, there is a risk that the government may step in to implement possible cooling measures, to keep public housing affordable. There is no better time to upgrade to a private property. Find out how you can leverage the property market to grow your investments, at www.assetprogressionleader.com.