SINGAPORE: The number of Housing and Development Board (HDB) resale flats sold fell to an all-time low in the first quarter of this year, with 3,781 units transacted.
This is the lowest figure recorded since HDB started releasing quarterly resale transaction volume data in 1997.
Both public and private units have also registered price declines in the first quarter, with the private market seeing its largest price drop since 2009.
The HDB Resale Price Index registered a 1.6 per cent decline in the first quarter, marking the third consecutive quarter that a price decrease has been recorded.
Transaction volumes also reached an all-time low, representing a 5 per cent drop compared to the previous quarter where 4,001 resale flats were transacted.
On the other hand, subletting transactions rose by 17 per cent in the first quarter, compared to the fourth quarter of last year.
There were 7,268 subletting cases in the fourth quarter of 2013, compared to 8,485 cases in the first quarter of 2014.
The total number of HDB flats approved for subletting also rose by 2.1 per cent, from 45,674 units in the fourth quarter of 2013, to 46,637 units in the first quarter of 2014.
Mr Chris Koh, director of Chris International, said: "Ever since the ruling was changed for owners to rent out their flats instead of selling them, many have chosen to rent them out. They are staying in their private condominiums and instead have rented out their flats. Unlike in the old days when they had to sell away their flat or stay in their flat and rent out their condo.
"So with that change of rule, many are tempted now to hold on to their flats because the rental that they get from their flats is not too bad. Some of them are renting out their flats as high as S$2,800 to S$3,000 a month. That's a lot of money for an HDB owner. They have realised today that now a flat becomes a form of investment, that holding (on to) their flat helps them enjoy rental, so they have got this rental yield."
Some property analysts expect prices to continue to decline for at least another quarter before stabilising, as more buyers are expected to be drawn back to the HDB resale market.
Just last month, HDB had revised its resale procedure to shift the attention of buyers and sellers away from the Cash-Over-Valuation component when negotiating a deal for an HDB resale flat.
In line with that, HDB has decided that from this quarter onwards, it will also not publish COV data by town or flat type.
As for the private market, with cooling measures taking effect, prices of private residential properties fell by 1.3 per cent in the first quarter of this year -- the largest drop since the second quarter of 2009, when prices fell by 4.7 per cent.
According to data from the Urban Redevelopment Authority, this is also the second consecutive quarter of decline following a 0.9 per cent drop in the previous quarter.
Properties in the city centre (Core Central Region) saw a price drop of 1.1 per cent, following a 2.1 per cent decrease in the previous quarter.
Prices in suburban areas (Outside Central Region) fell by 0.1 per cent after a 1.0 per cent decrease in the last three months of 2013.
But it was prices in the city's fringes (Rest of Central Region) which saw the biggest drop this time round, with a decline of 3.3 per cent, reversing a 0.4 per cent increase in the previous quarter.
Rentals also slowed, falling 0.7 per cent in the first quarter. This is greater than the 0.5 per cent decline in the fourth quarter of 2013.
Developers also launched and sold fewer uncompleted private residential units, excluding executive condominiums, compared to the last three months of 2013.
There were fewer than 2,000 units launched in Q1, compared to more than 2,600 in Q4.
A total of 1,744 private residential units, excluding ECs, were sold in Q1 of this year, compared to 2,568 units sold in the fourth quarter of 2013.
Mr Alan Cheong, senior director of Research & Consultancy at Savills Singapore, said: "Low transactions doesn't necessarily mean the market is in dire straits. You have to pair that up with the launches and it's about 87 per cent. No doubt it's lower than the 97 per cent seen in the first quarter of 2013, but still it's a healthy number.
"For the second quarter we will see a flurry of launches, in the RCR region in particular, so we will see transaction volumes going up because in Singapore there's this phenomenon that demand chases supply, whether it's in the office sector, retail sector or residential sector."
A total of 14,985 units, including executive condominiums, are expected to be completed in the last three quarters of this year, bringing the total to 19,505 units this year.
Another 24,592 units are also set to be completed next year. In comparison, about 14,400 units were completed in 2013. - CNA/nd/de
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