Property insiders yesterday expressed surprise as resale prices of public- housing units hit a record high this year, even as the Housing Board (HDB) ramps up the supply of new flats.
Government flash estimates released yesterday revealed that resale prices increased by 2 per cent in the third quarter of the year - the sharpest increase so far this year.
Prices had earlier risen by 0.6 per cent in the first quarter, then by 1.3 per cent the following quarter.
The third quarter of last year also brought in the highest price increment for the year with an increase of 3.8 per cent.
PropNex chief executive Mohamed Ismail said: "This is somewhat unexpected...with the onset of a greater supply of Build-To-Order flats since 2011, and the moderation of resale prices in the first two quarters of this year."
Last week, HDB announced that the total supply of BTO flats this year will hit a record 27,000 units, up by 2,000 units from the 25,000 planned originally.
Reasons for the price spike cited by Mr Ismail and other experts include a relatively strong demand for public housing; sellers holding firm to their asking prices; and the decrease in the number of resale flats available because of the five-year minimum-occupation period.
Mr Lee Sze Teck, senior manager of Dennis Wee Group, said that resale prices could be capped at "not more than 2 per cent increase" in the fourth quarter of the year.
"We expect activity in the HDB resale market to take a breather because there may be a stand-off between buyers and sellers," he explained, saying that this could be attributed to recent record-breaking deals.
Meanwhile, private-property prices also inched upwards to a new record in the third quarter of the year, according to preliminary data released by the Urban Redevelopment Authority in a separate statement.
Overall, prices rose by 0.5 per cent, compared to 0.4 per cent in the previous quarter.
Mr Png Poh Soon, head of research at Knight Frank Singapore, attributed this to the "changing buyers' profile" where home buyers comprise owner-occupiers and younger investors. They tend to be undeterred from entering the market during the Hungry Ghost Month - typically a lull period for both property developers and buyers.
He added: "These buyers, who are more concerned about budget and investment potential, focused on getting the best- value buys."