Resale HDB flat prices hit new high

http://www.straitstimes.com/PrimeNew...ry_473572.html

Jan 5, 2010

Resale HDB flat prices hit new high

Year's total increase amounts to 8%; private home prices too are up

By Jessica Cheam


HOUSING Board (HDB) resale flat prices continue to climb ever higher, with prices in the fourth quarter of last year setting a new record.

Flash estimates released by the HDB yesterday show prices rose by 3.8 per cent in the fourth quarter, bringing last year's total price rise to about 8 per cent - a surprise outcome for many property experts who had predicted price falls at the start of last year.

The Resale Price Index (RPI) hit 150.7 in the fourth quarter, up from the third quarter's 145.2 and far beyond the previous peak of 136.9 achieved in the fourth quarter of 1996.

HDB flat prices have risen almost 40 per cent over the past three years.

Private home prices put on an even more impressive 7.3 per cent rise in the fourth quarter of last year compared to the third. This came on top of a 15.8 per cent gain in the third over the second quarter.

Urban Redevelopment Authority estimates released yesterday showed private home prices rose about 1.7 per cent over the whole of last year.

Analysts say the skyward rise in prices is down to demand outpacing supply.

A quicker-than-expected economic recovery during the year and a booming immigrant population, with many new families and expatriates relocating to Singapore post-economic crisis, contributed to the strong demand.

PropNex chief executive Mohamed Ismail said that permanent residents easily made up 20 per cent of his agency's total HDB sales.

At C&H Realty, this group of buyers account for as many as 50 per cent of all HDB resale transactions, revealed managing director Albert Lu.

Mr Patrick Grove, executive chairman of online portal iproperty.com.sg, said an interesting trend to emerge was the increase in foreigners interested in Singapore properties.

The portal's traffic from foreign countries grew by up to 20 per cent month-on-month during the second half of last year. This compares to 5 per cent to 10 per cent growth for Singapore-originated searches.

'There's more demand for homes now that the worst of the economic crisis is over. Low interest rates are also a key factor, as it's more affordable than ever to buy a property,' added Mr Grove.

Ngee Ann Polytechnic real estate lecturer Nicholas Mak pointed out that continued recovery in private home prices meant some home buyers were being priced out of this market, and had to turn to HDB resale flats.

'As long as the prices of suburban condominiums remain relatively high, there will be space for resale flat prices to expand,' he said.

Analysts do not see any end in sight to the increase in HDB values. They are predicting price rises in the range of 8 per cent to 15 per cent for HDB flats for 2010.

Mr Lu reckons prices will rise about 3 per cent each quarter. But PropNex's Mr Ismail predicts a slowdown in the rate of increase - to about 2 per cent during the first quarter of the year.

Despite further flat supplies set to come onstream during the year, Mr Mak expects prices to gain another 8 per cent to 15 per cent this year.

HDB yesterday moved to address supply concerns by announcing it would launch more build-to-order (BTO) flats this year if there was 'sustained demand for new flats'. It would, it added, 'ensure that there is an adequate supply of flats to meet prevailing housing needs'.

Some 1,300 new flats are to be launched for sale today by HDB in Choa Chu Kang and Hougang.

As an indication of the red-hot demand for homes, there was an overwhelming response to a recent launch by HDB of BTO flats at Dawson, where some flats were more than 11 times oversubscribed.

Industry observers are unsure whether BTO flat supply will have a significant impact on the current high level of demand, given that such flats typically take three to four years to complete.

'BTO flats do not provide immediate roofs over heads, so resale flats will continue to be in high demand. But the supply of new flats will go towards stabilising HDB resale price increases,' said Mr Ismail.

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http://www.channelnewsasia.com/stori...028513/1/.html

HDB resale prices climb 3.8% to hit record high in Q4 2009

By Cheryl Lim/Wong Siew Ying, Channel NewsAsia | Posted: 04 January 2010 2157 hrs


SINGAPORE: Prices of resale Housing and Development Board (HDB) flats rose 3.8 per cent in the fourth quarter of 2009, reaching the highest level since 1990, when records of such data began.

The Resale Price Index of public flats stood at 150.7 in the fourth quarter of last year. But some said that spiralling prices will not deter potential buyers.

Despite the record high prices, one real estate consultant said prices of most of the larger HDB units have not increased dramatically.

Donald Han, managing director, Cushman & Wakefield said: "If you look at the overall pricing for the four- and five-room flats, they are all still within the norm, and very much far apart from the kind of headline transaction news that you get of about S$700,000, S$800,000 in that sense."

According to some others, resale flats have strong potential to rise further due to demand from newly formed families and permanent residents.

Nicholas Mak, real estate lecturer, Ngee Ann Polytechnic said: "Going forward the case of price growth is not going to be 3 to 4 per cent every quarter. Otherwise, we could see very high unsustainable levels for the HDB resale market.

"It is more likely going to grow at a pace of between, perhaps eight to maybe as high as 15 per cent for the whole of 2010."

The HDB said it will continue to launch more Build-to-Order (BTO) projects this year, if there is a sustained demand for new flats. And it said it will continue to ensure that there is an adequate supply of flats to meet the prevailing housing needs.

For a start, 1,300 BTO flats in Choa Chu Kang and Hougang will be offered for sale on Tuesday. But it will take up to four years before the BTO flats are ready.

So for those who cannot wait, resale flats are one option, thereby, driving up demand and prices.

The HDB will release its detailed resale price data and public housing data for the fourth quarter on January 22.

- CNA/sc