reporter2
05-01-15, 17:13
http://www.businesstimes.com.sg/real-estate/hdb-resale-flat-prices-down-6-for-the-year
HDB resale flat prices down 6% for the year
But shift from seller's market to buyer's market not over yet: property consultants
By Lynette Khoo
[email protected]@LynetteKhooBT
3 Jan
THERE is no sign of a bottoming out of HDB resale prices even as the latest flash estimates from the Housing & Development Board (HDB) showed prices falling by 6 per cent for the whole of last year.
The estimated 1.4 per cent quarterly drop in the fourth quarter - though milder than the 1.7 per cent fall in the third quarter - marked a sixth straight quarter of decline in the HDB Resale Price Index (RPI) to a level last seen in 2011.
The index's full-year drop of 6 per cent is also the steepest decline since 2001, with last year marking a turn in Singapore's housing market engineered by the government's cooling measures.
While the extent of price falls came largely within market's expectations, this shift from a seller's market to a buyer's market is not over yet, property consultants say, reiterating what Minister for National Development Khaw Boon Wan said in his blog this week. This is notwithstanding the fact that the HDB is scaling down its build-to-order (BTO) programme to 16,900 units this year from the 22,400 units in 2014.
PropNex Realty chief executive Mohamed Ismail reckoned that HDB resale prices will not recover this year given "a looming flood of new homes and the continued impact of property measures" such as the lower mortgage servicing ratio, shorter loan tenure and a minimum three-year waiting period for new permanent residents wanting to buy HDB resale flats.
"Loan curbs and softer prices will ultimately mean that HDB upgraders will find it more prohibitive to upgrade to a private property," Mr Mohd Ismail concluded. "The outlook for 2015 will continue to be moderated with a possible 5-6 per cent full-year price drop. This is mainly due to the increased number of second-timers collecting their keys to their new BTO flats, and they will have to sell their existing flats within six months. This figure is expected to be about 6,000 annually for the next two years."
HDB's overhaul of the resale procedure since March 2014, requiring the buyer to first obtain the option to purchase from the seller before requesting a valuation report from HDB also stoked greater caution among buyers and sellers last year.
Century 21 Singapore CEO Ku Swee Yong said that he expects 26,000 new HDB flats to be completed this year, and over 23,000 executive and private condominiums to receive their temporary occupation permits (TOP). Many of these units belong to second-timers or upgraders, who will probably sell their existing homes when they receive the keys to the new properties.
With high selling pressure and a flat rental demand unless the government relax its rules on immigration and foreign labour, prices will not recover, Mr Ku said.
The finalised RPI and more detailed public housing data for the fourth quarter of 2014 will be released on Jan 23. Property consultants are expecting resale transaction volumes last year to be in the region of 17,000 units - the lowest historical level.
ERA Realty key executive officer Eugene Lim said that he was hopeful that there would be a rebound in the number of resale transactions this year as HDB scales down its BTO programme and as resale HDB prices continue to stabilise.
HDB is planning to launch four BTO exercises this year, with a total supply of 16,900 new flats. This will include BTO flats in new areas such as Bidadari and Punggol Northshore. The first BTO exercise will be held in February to roll out some 3,940 new flats in Bukit Batok, Geylang and Hougang.
"In the absence of any change to the current resale policies and loan criteria, we can expect resale HDB prices to continue its moderate decline in 2015 by another 5-8 per cent for the whole year," Mr Lim projected.
The flash RPI for the fourth quarter was computed using a new "stratified hedonic regression" method that incorporates regression analysis to better control for variations in flat attributes.
To make the RPI more reflective of the current market, its data coverage has also expanded to include all towns and flat models. It had previously excluded 12 towns including Bishan, Queenstown, Sengkang and Punggol. The index is also rebased to the first quarter of 2009, its most recent trough.
HDB resale flat prices down 6% for the year
But shift from seller's market to buyer's market not over yet: property consultants
By Lynette Khoo
[email protected]@LynetteKhooBT
3 Jan
THERE is no sign of a bottoming out of HDB resale prices even as the latest flash estimates from the Housing & Development Board (HDB) showed prices falling by 6 per cent for the whole of last year.
The estimated 1.4 per cent quarterly drop in the fourth quarter - though milder than the 1.7 per cent fall in the third quarter - marked a sixth straight quarter of decline in the HDB Resale Price Index (RPI) to a level last seen in 2011.
The index's full-year drop of 6 per cent is also the steepest decline since 2001, with last year marking a turn in Singapore's housing market engineered by the government's cooling measures.
While the extent of price falls came largely within market's expectations, this shift from a seller's market to a buyer's market is not over yet, property consultants say, reiterating what Minister for National Development Khaw Boon Wan said in his blog this week. This is notwithstanding the fact that the HDB is scaling down its build-to-order (BTO) programme to 16,900 units this year from the 22,400 units in 2014.
PropNex Realty chief executive Mohamed Ismail reckoned that HDB resale prices will not recover this year given "a looming flood of new homes and the continued impact of property measures" such as the lower mortgage servicing ratio, shorter loan tenure and a minimum three-year waiting period for new permanent residents wanting to buy HDB resale flats.
"Loan curbs and softer prices will ultimately mean that HDB upgraders will find it more prohibitive to upgrade to a private property," Mr Mohd Ismail concluded. "The outlook for 2015 will continue to be moderated with a possible 5-6 per cent full-year price drop. This is mainly due to the increased number of second-timers collecting their keys to their new BTO flats, and they will have to sell their existing flats within six months. This figure is expected to be about 6,000 annually for the next two years."
HDB's overhaul of the resale procedure since March 2014, requiring the buyer to first obtain the option to purchase from the seller before requesting a valuation report from HDB also stoked greater caution among buyers and sellers last year.
Century 21 Singapore CEO Ku Swee Yong said that he expects 26,000 new HDB flats to be completed this year, and over 23,000 executive and private condominiums to receive their temporary occupation permits (TOP). Many of these units belong to second-timers or upgraders, who will probably sell their existing homes when they receive the keys to the new properties.
With high selling pressure and a flat rental demand unless the government relax its rules on immigration and foreign labour, prices will not recover, Mr Ku said.
The finalised RPI and more detailed public housing data for the fourth quarter of 2014 will be released on Jan 23. Property consultants are expecting resale transaction volumes last year to be in the region of 17,000 units - the lowest historical level.
ERA Realty key executive officer Eugene Lim said that he was hopeful that there would be a rebound in the number of resale transactions this year as HDB scales down its BTO programme and as resale HDB prices continue to stabilise.
HDB is planning to launch four BTO exercises this year, with a total supply of 16,900 new flats. This will include BTO flats in new areas such as Bidadari and Punggol Northshore. The first BTO exercise will be held in February to roll out some 3,940 new flats in Bukit Batok, Geylang and Hougang.
"In the absence of any change to the current resale policies and loan criteria, we can expect resale HDB prices to continue its moderate decline in 2015 by another 5-8 per cent for the whole year," Mr Lim projected.
The flash RPI for the fourth quarter was computed using a new "stratified hedonic regression" method that incorporates regression analysis to better control for variations in flat attributes.
To make the RPI more reflective of the current market, its data coverage has also expanded to include all towns and flat models. It had previously excluded 12 towns including Bishan, Queenstown, Sengkang and Punggol. The index is also rebased to the first quarter of 2009, its most recent trough.