HDB resale prices up 0.1% in June: SRX

[reporter2]

HDB resale prices up 0.1% in June: SRX

This reflects increased stability in resale prices of Housing Board flats: consultants

By Lynette Khoo [email protected]

JUL 10, 2015


RESALE prices of Housing & Development Board (HDB) flats inched up 0.1 per cent in June from May 2015, according to the latest flash estimates of SRX Property. For some consultants, this reflects increased stability in HDB resale prices and hence a less pressing need for the government to relax its property cooling measures.

SRX estimates showed 0.3 per cent, 0.5 per cent and 0.7 per cent price increases for four-room, five-room and executive resale flats respectively. Resale prices for three-room flats, however, dipped 0.2 per cent.

SRX's flash index for HDB resale prices still represents a 4.4 per cent fall from a year ago and a 10.9 per cent slump from the peak in April 2013.

ERA Realty key executive officer Eugene Lim noted that since March, prices have remained largely unchanged as policies such as the lowering of mortgage servicing ratio to 30 per cent of the borrower's gross monthly income and the ramp-up in Build-To-Order (BTO) flats have curbed the price surge and stabilised public housing prices. "Currently, it seems that prices have found their support level," he said.

According to SRX estimates, HDB resale prices fell 0.4 per cent in mature estates but rose 0.3 per cent in non-mature estates in June. Year on year, prices in mature estates and non-mature estates have fallen 3.5 per cent and 5 per cent respectively.

Some 1,709 HDB resale flats were sold in June, marking an 8.5 per cent increase from May and a 30 per cent year-on-year jump, based on data compiled by SRX.

This means resale volume in June was the highest since May 2013.

SLP International executive director Nicholas Mak noted that the increase in the resale volume and a stabilised price index could be due to a reduction in the supply of BTO flats by the government this year.

With the frequency of the BTO exercise lengthened from once every two months to once every quarter, homebuyers who need HDB flats urgently could be drawn to the resale market; the lowered HDB resale prices have also attracted some buyers, he said.

But Mr Mak noted that if the second quarter of 2015 is really the start of the recovery of the HDB resale market in terms of prices and transaction volume, then it begs the question of whether it is necessary for the government to relax the cooling measures.

"It is our opinion that if the government were to relax any of the existing property market cooling measures, the government's priority would be to adjust the curbs imposed on the public housing market first as the majority of the population and voters live in and own HDB flats," he said.

"If the government were to find that it has become unnecessary to relax the public housing market curbs, then it could be even more unlikely for it to lighten the private housing market cooling measures, which is long awaited by many market participants," Mr Mak reasoned.

R'ST Research director Ong Kah Seng reckoned that HDB flat owners who have difficulty selling their flats have generally not lowered prices excessively and they will still achieve profits upon a resale. "Most flat owners are still sitting on paper gain or enjoying profits upon the resale of their BTO flats," Mr Ong said. "It therefore means there is little pressing need for the removal of the cooling measures."

[reporter2]

HDB resale volume hits two-year high in June

PUBLISHED JUL 10, 2015

Data lifts hopes of recovery; prices of resale flats inch up 0.1% in further sign that market may be stabilising

Yeo Sam Jo


The resale volume for Housing Board flats rose to its highest in two years last month, further signalling a market recovery.

There were 1,709 HDB flats sold in June, up by more than 8 per cent from the 1,575 units in May, according to the latest SRX Property data.

This is the highest since May 2013, and a third up from last June.

Resale prices also inched up by 0.1 per cent last month, after rising by 0.2 per cent in April and staying flat in May. While prices of three-room flats dipped by 0.2 per cent, those of four-room, five-room and executive flats were up by 0.3 per cent, 0.5 per cent and 0.7 per cent respectively.

This comes after months of prices heading south, following the introduction of market cooling measures such as an increased mortgage servicing ratio limit.

Said ERA Realty key executive officer Eugene Lim: "This adds strength to the proposition that HDB resale prices are stabilising." He noted prices have "practically remained unchanged" since March.

SLP International Property Consultants research head Nicholas Mak said the higher resale volume could indicate a sustainable level of demand - an "essential ingredient" for steady price growth.

Mr Donald Yeo, head of agency and training at real estate firm DWG, said this is a sign that more sellers have come to terms with the weaker market: "They were waiting for prices to go back up. But some have become more realistic and don't want to make a bigger loss."

Mr Lim expects resale volume to stay resilient as the Government eases the Build-To-Order (BTO) flat supply, and buyers with immediate housing needs turn to resale units.

But experts believe that any rebound in prices will be slow, partly due to ongoing cooling measures.

R'ST Research director Ong Kah Seng believes buyers will remain selective "amid ample choices of flats put up for sale".

Despite the hint of an uptick, overall resale prices last month were still down 4.4 per cent from a year before, and almost 11 per cent from the peak in April 2013. Resale volume was also still more than half down from its peak of 3,649 units in May 2010, said SRX Property.

Sellers, like a housewife who wanted to be known only as Mrs Lee, remain worried. She and her husband put their four-room Sembawang unit on the market three months ago, after they collected the keys to their new flat in Serangoon. "I have had no luck so far and have only three more months to sell it off," said the mother of four, who is in her late 30s.

HDB flat owners have to sell their existing flat within six months of getting their new HDB home.

Said Mrs Lee: "I don't want to lower my price further because I still have to pay a $40,000 resale levy."