Pick-up in resale flat prices 'will be slow'

[reporter2]

http://www.straitstimes.com/singapore/housing/pick-up-in-resale-flat-prices-will-be-slow

Pick-up in resale flat prices 'will be slow'

Experts said the new grant and the higher income ceilings for resale flats will draw more buyers, especially in mature estates.

Sep 4, 2015

Yeo Sam Jo


Resale prices of Housing Board flats rose slightly last month, sticking to their relatively flat trend in recent months.

While experts said the market might pick up with the new housing policies announced at the National Day Rally, they maintained that any recovery will be slow because of the cooling measures still in force. Overall, prices inched up 0.3 per cent from July to last month, according to the latest figures from SRX Property.

This was led mainly by the prices of four- and five-room flats, which increased by 1.4 per cent and 0.9 per cent respectively.

Prices of three-room and executive flats, however, slid by 0.7 per cent and 2 per cent respectively.

Compared with a year ago, prices have dipped 3 per cent, and are down 11.3 per cent since their peak in April 2013. The number of transacted units, however, dropped by 6.8 per cent. There were 1,447 flats sold last month, down from the 1,552 that changed hands in July.

ERA Realty key executive officer Eugene Lim said this decrease in volume was expected.

"August coincides with the onset of Hungry Ghost Festival (on Aug 14) and some people prefer not to buy properties during that period," he explained. Mr Lim added that the year-on-year volume growth of 9 per cent is "more telling that buyers are entering the market".

Experts said the new Proximity Housing Grant (PHG) and the higher income ceilings for the Central Provident Fund Housing Grant for resale flats, both introduced last month, will draw more buyers, especially in mature estates.

The $20,000 PHG is offered to all Singapore citizen families who buy a resale flat to live with or near their parents or married child. Eligible singles will also get $10,000 if they buy a resale flat with their parents. Said R'ST Research director Ong Kah Seng: "There will be more buyers who will be getting a flat near parents due to the grants."

However, as long as cooling measures remain, resale prices will not go up by much, analysts said.

"We do not think sellers are in a position to take advantage of this by increasing prices as buyers nowadays are more prudent in their price negotiation. Most will make an offer based on recent transacted prices," said Mr Lim.

Mr Ong said: "Buyers will still eventually evaluate their housing requirements and the unit holistically... instead of rapidly tapping the grant to snap a flat near their parents."

[reporter2]

http://www.businesstimes.com.sg/real-estate/hdb-resale-prices-rise-03-transactions-fall-68-in-aug-srx

HDB resale prices rise 0.3%, transactions fall 6.8% in Aug: SRX

Some prospective buyers delay purchases until after Hungry Ghost month

By Lynette Khoo

[email protected]@LynetteKhooBT

Sep 4, 2015


HDB resale prices edged up in August while resale transactions dipped during the ghost month, going by the latest flash estimates by SRX Property on Thursday.

Resale prices climbed 0.3 per cent last month, led by four-room and five-room flats; SRX Property revised its index for July, which now shows a 0.6 per cent drop in HDB resale prices instead of a 0.5 per cent drop.

A 6.8 per cent month-on-month fall in resale transactions to 1,447 in August came in largely expected since some prospective buyers prefer to hold back their purchases until the Hungry Ghost festival is over.

What was more telling, however, was the year-on-year improvement of 9 per cent in resale transactions, ERA Realty key executive officer Eugene Lim pointed out.

"We are likely to see resale volume increase in the future as the new policies announced during the National Day Rally take effect, possibly hitting 19,000 to 21,000 for the whole year," Mr Lim said. For the first eight months of this year, HDB resale transactions totalled 11,644, according to SRX Property.

"In particular, the Proximity Housing Grant (PHG) is expected to boost the number of resale transactions, especially in mature estates, as families make use of this grant to purchase a flat near their parents."

From Aug 24, the new PHG allows all Singaporean families buying a resale flat near their parents or married child a subsidy of S$20,000 (S$10,000 more than the previous Higher-Tier CPF Housing Grant); eligible singles will get a subsidy of S$10,000 (S$5,000 more than before) if they buy a resale flat with their parents. The Higher-Tier CPF Housing Grant will be discontinued.

The income ceiling for a HDB loan or CPF Housing Grant was also raised to a monthly gross household income of S$12,000 from S$10,000 previously, in tandem with the raising of income ceiling for citizen households to buy new flats and executive condominiums.

Still, sellers are unlikely to raise their prices as buyers nowadays are more prudent in their price negotiation, Mr Lim said.

On the whole, HDB resale prices in August are still 3 per cent lower than a year ago and 11.3 per cent below the SRX's index peak in April 2013.

Last month, HDB resale prices in both mature and non-mature estates edged up 0.2 per cent and 0.3 per cent month on month respectively.

Islandwide, resale prices of HDB four and five-room flats rose 1.4 per cent and 0.9 per cent respectively, while prices of HDB three-room and executive flats slipped by 0.7 per cent and 2 per cent respectively.

Mr Lim noted that with the loan curbs and cooling measures still in place, most buyers will make an offer based on recent transacted prices.

HDB resale flats were transacted in August at a median price that is equal to the X-value, which is SRX Property's computer-generated estimated market value based on past transacted prices.

"We do not see any huge impact on HDB resale prices being increased as a result of more help from the government," Mr Lim said, projecting a full-year price drop of not more than 5 per cent.