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30-01-14, 11:37
http://www.straitstimes.com/archive/saturday/premium/top-the-news/story/first-hdb-resale-price-dip-2005-20140125
FALL IN PROPERTY PRICES
First HDB resale price dip since 2005
Transactions also hit new low, but experts expect them to pick up
Published on Jan 25, 2014
By Janice Heng
HOUSING Board resale flat prices fell by 0.6 per cent last year, marking the first annual fall since 2005.
The dip came after a 6.6 per cent jump in 2012, and two years of double-digit growth before that.
The volume of resale transactions also hit a record low last year, according to data released yesterday by the HDB.
Experts, however, expect things to pick up this year as falling prices pull buyers back into the market.
There were 18,100 resale transactions last year, a 28 per cent dip from the 2012 figure and the lowest since 1997.
Experts said this was expected, given last August's curbs on loans and permanent resident (PR) buyers, as well as the abundance of new flats available for first-timers.
"The HDB resale market is effectively serving only upgraders and (a limited number of) PRs now, resulting in the weakening of prices and volume of transactions," said PropNex Realty chief executive officer Mohamed Ismail. But the falling prices may improve demand, he added.
As resale prices dipped, cash-over-valuations (COVs) also tumbled.
PropNex estimates that the median COV fell 78 per cent from the first quarter to the fourth. ERA Realty believes cash premiums dropped by 76 per cent from 2012 to last year.
Latest HDB data shows that median COVs have gone below $10,000 in many towns, especially for smaller flats. The lowest was in Punggol, where the median COV for four- and five-room flats was zero. It was $45,000 and $42,000, respectively, in the fourth quarter of 2012.
Experts said cash premiums are likely to keep falling, with more deals closing at or below a flat's valuation.
"It is good for us because that means that we would have to pay less up front," said a buyer who wanted to be known only as Ms Yap.
The 30-year-old civil servant and her fiance started searching for a resale flat in October and have come across sellers who asked for "ridiculous prices", such as a $200,000 cash premium for a flat valued at $680,000.
Experts believe the adjustment could happen as early as the first half of this year, leading to more resale deals.
Mr Ismail expects about 20,000 resale transactions this year, an increase of around 10 per cent from last year's figure.
ERA Realty key executive officer Eugene Lim also expects resale volume to be 5 per cent to 10 per cent higher.
But R'ST Research director Ong Kah Seng said: "I wouldn't expect it to go back to the levels of 2012 or 2011."
He believes next year's activity may be similarly muted.
Rents, however, have managed to hold firm. The HDB's fourth- quarter figures from last year show that rents had largely edged upwards or held steady from the same period in 2012.
In Queenstown, for instance, the median rent was $2,300 for three-room flats and $3,000 for four-room flats, both up $100 from the year before.
This could change with more private condominiums being completed this year.
With more flats put up for rent, Mr Ong expects rentals in "far-flung locations" such as Jurong to fall. However, he believes rents in mature estates will remain steady.
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FALL IN PROPERTY PRICES
First HDB resale price dip since 2005
Transactions also hit new low, but experts expect them to pick up
Published on Jan 25, 2014
By Janice Heng
HOUSING Board resale flat prices fell by 0.6 per cent last year, marking the first annual fall since 2005.
The dip came after a 6.6 per cent jump in 2012, and two years of double-digit growth before that.
The volume of resale transactions also hit a record low last year, according to data released yesterday by the HDB.
Experts, however, expect things to pick up this year as falling prices pull buyers back into the market.
There were 18,100 resale transactions last year, a 28 per cent dip from the 2012 figure and the lowest since 1997.
Experts said this was expected, given last August's curbs on loans and permanent resident (PR) buyers, as well as the abundance of new flats available for first-timers.
"The HDB resale market is effectively serving only upgraders and (a limited number of) PRs now, resulting in the weakening of prices and volume of transactions," said PropNex Realty chief executive officer Mohamed Ismail. But the falling prices may improve demand, he added.
As resale prices dipped, cash-over-valuations (COVs) also tumbled.
PropNex estimates that the median COV fell 78 per cent from the first quarter to the fourth. ERA Realty believes cash premiums dropped by 76 per cent from 2012 to last year.
Latest HDB data shows that median COVs have gone below $10,000 in many towns, especially for smaller flats. The lowest was in Punggol, where the median COV for four- and five-room flats was zero. It was $45,000 and $42,000, respectively, in the fourth quarter of 2012.
Experts said cash premiums are likely to keep falling, with more deals closing at or below a flat's valuation.
"It is good for us because that means that we would have to pay less up front," said a buyer who wanted to be known only as Ms Yap.
The 30-year-old civil servant and her fiance started searching for a resale flat in October and have come across sellers who asked for "ridiculous prices", such as a $200,000 cash premium for a flat valued at $680,000.
Experts believe the adjustment could happen as early as the first half of this year, leading to more resale deals.
Mr Ismail expects about 20,000 resale transactions this year, an increase of around 10 per cent from last year's figure.
ERA Realty key executive officer Eugene Lim also expects resale volume to be 5 per cent to 10 per cent higher.
But R'ST Research director Ong Kah Seng said: "I wouldn't expect it to go back to the levels of 2012 or 2011."
He believes next year's activity may be similarly muted.
Rents, however, have managed to hold firm. The HDB's fourth- quarter figures from last year show that rents had largely edged upwards or held steady from the same period in 2012.
In Queenstown, for instance, the median rent was $2,300 for three-room flats and $3,000 for four-room flats, both up $100 from the year before.
This could change with more private condominiums being completed this year.
With more flats put up for rent, Mr Ong expects rentals in "far-flung locations" such as Jurong to fall. However, he believes rents in mature estates will remain steady.
[email protected]