HDB resale prices continue slide, down 1.6% in Q1

[reporter2]

http://www.businesstimes.com.sg/archive/saturday/premium/top-stories/hdb-resale-prices-continue-slide-down-16-q1-20140426

Published April 26, 2014

HDB resale prices continue slide, down 1.6% in Q1

Downtrend expected to stretch further; but subletting deals hit record for a quarter

By Lynette Khoo

[email protected] @LynetteKhooBT


RESALE prices of public flats slipped for the third consecutive quarter, and analysts expect this downtrend to continue amid market caution and a large supply of new flats coming onstream.

Data from the Housing and Development Board (HDB) showed that resale prices in the first quarter fell 1.6 per cent from the previous quarter ago, following a 0.9 per cent dip in the third quarter and 1.5 per cent decline in the fourth quarter of last year.

Resale transactions fell 5 per cent in the quarter to 3,781.

Property consultants attributed the subdued market activity to recent government measures.

"As loan curbs continue to dampen the market, more transactions are taking place at valuation price," said ERA Realty key executive officer Eugene Lim.

He noted that the lowering of the mortgage servicing ratio from 35 per cent to 30 per cent has hampered the ability of some buyers from getting bigger and more expensive flats.

Other factors that dented resale activity include the minimum three-year waiting period for newly minted permanent residents before they can buy resale flats and the availability of two-room build-to-order (BTO) flats for eligible singles, he said.

Christine Li, head of research and consultancy at OrangeTee, noted that the festive season lull and the abolishment of cash-over-valuation (COV) added uncertainty to the resale market, "causing buyers and sellers to hold back".

Under HDB's revised resale procedure in March, sellers can no longer obtain a valuation from HDB to aid their price negotiations. Buyers now need to first obtain the OTP (option to purchase) from the seller before they can request a valuation from HDB.

For the first time since 2007, HDB ceased publication of the quarterly median COV by town and flat type, in line with its stance to shift the focus from COV to transacted prices in price negotiations.

Instead, HDB gave the breakdown on median resale prices by town and flat type. Median resale prices for four-bedroom flats in Bishan slid 6.6 per cent quarter-on-quarter to $509,000 while that for three-room flats in Queenstown fell 9.6 per cent to $369,000.

Though no official COV data is available for the first quarter, analysts noted that the median COV has fallen to zero or slightly negative in March.

The muted resale activity has benefited the sub-letting market as HDB owners who cannot get a good price for their flats may decide to rent out their units instead.

HDB data showed that subletting transactions increased 17 per cent quarter-on-quarter in the first quarter to 8,485 - a historical high number of subletting transaction in one quarter.

Subletting transactions could increase as more private residential homes are completed, said Ong Kah Seng, director of R'ST Research, adding that he expects many HDB upgraders to move into the new condos and rent out their existing flats.

Some 80,000 new BTO flats will be completed and keys handed over to buyers in the next three years. HDB is slated to release a further 3,060 BTO flats in Bukit Batok and Woodlands in May and 3,000 flats in a concurrent Sale of Balance Flats exercise.

Mr Ong said there is still potential for prices to fall by up to 2 per cent quarter-on-quarter in the next six months, before stabilising in the fourth quarter.

[Arcachon]

The Straits Times - May 2, 2014
By: Janice Heng

FEWER flat owners are jumping at the chance to sell their Housing Board unit once they can, as weak resale prices make it more worthwhile to hold on.

Two years ago, almost one in five of those who turned eligible to sell their flat - having stayed for the minimum five years - promptly did so within the year.

But last year, amid a cooling market, only 5.5 per cent who had met the minimum occupation period (MOP) did so.

Of 8,521 possible flats, 470 changed hands within a year of meeting MOP, HDB figures showed.

Given the lacklustre resale market overall, it is no surprise that few newly eligible flats are changing hands too, said Chris International director Chris Koh.

HDB resale transactions fell to just 18,100 last year, the fewest since 1997.

Experts said that flat owners were holding on to their homes in the face of low resale prices and cash over valuation (COV).

Resale prices fell 0.6 per cent over 2013, the first annual decline since 2005.

As for COVs, these cash premiums could once hit six figures for a choice unit. But they had fallen to a median of zero in February and were removed from the resale process in March.

"Flat owners whose homes are ready for resale realise they can no longer make a windfall from high COV when they sell their flat," said R'ST Research director Ong Kah Seng.

Then, there may be flat owners who would like to sell, but cannot afford to upgrade.

After all, selling "is possible only if they can buy another property", said Mr Koh.

And tighter rules have made it harder to get a sufficient loan to upgrade, he noted.

Since August, the maximum tenure for HDB home loans has been cut, and buyers can use only up to 30 per cent of their income to service their mortgage, down from 35 per cent.

Those hoping to upgrade to private property face similar curbs.

"Thus many of them decided to stay put," said Mr Koh.

OrangeTee head of research Christine Li notes that the gap between HDB resale prices and those of mass-market condominiums has also widened.

Over the past year, the price index for mass-market homes has actually risen 4.8 per cent, according to Singapore Real Estate Exchange figures, she said.

Flat owners "who had upgrading plans previously have to rethink their plans".

And as the quality and design of new HDB flats and estates improve, upgrading to a resale flat or private property becomes a less attractive option, added Mr Ong.

Finally, even if more of the newly eligible wish to sell their flats, they may not find buyers.

Resale demand has fallen, partly since the August rule change requiring new permanent residents to wait three years before buying an HDB flat.

Ms Li said: "Some HDB sellers could take up to several months before finding a buyer."

http://www.stasiareport.com/news/sin...-sale-20140502

[phantom_opera]

Really ah? Even old old flats from 1989 and 1979 is selling > 600k ... it is all about location ... as long as near MRT price firm or even up :tongue3:

3 MAY 2014 QUEENSTOWN BLK 18C HOLLAND DRIVE XX TO XX 5-ROOM 99 YRS FROM 2012 117 7,778 SGD910,000

30 APR 2014 ANG MO KIO BLK 596D ANG MO KIO STREET 52 XX TO XX 5-ROOM 99 YRS FROM 2003 110 7,436 818,000

29 APR 2014 TAMPINES BLK 518A TAMPINES CENTRAL 7 XX TO XX 5-ROOM 99 YRS FROM 2008 109 6,606 720,000

29 APR 2014 BEDOK BLK 115 LENGKONG TIGA XX TO XX 5-ROOM 99 YRS FROM 1989 122 5,984 730,000

30 APR 2014 CLEMENTI BLK 342 CLEMENTI AVENUE 5 XX TO XX 5-ROOM 99 YRS FROM 1979 121 5,273 638,000 (near MRT)

30 APR 2014 HOUGANG BLK 16 HOUGANG AVENUE 3 XX TO XX 5-ROOM 99 YRS FROM 1975 123 4,878 600,000 (near Kovan MRT)