http://business.asiaone.com/Business...10-338747.html

Thursday, Apr 12, 2012

The New Paper

Prices not representative of overall HDB flat prices

By Benson Ang


So, what's next? $1 million for a resale HDB flat?

Unlikely, say property experts.

They said that the slew of cooling measures introduced by the Government last year have helped to stabilise the resale market.

So the flats that sold for $900,000 are the exception.

Mr Mohamed Ismail, chief executive officer of PropNex, said these prices do not represent the overall prices of HDB flats, or even similar flats in the same block.

For example, he said, flats which command such high prices are typically on high floors with an unobstructed view.

They are also well-renovated and, in some instances, have designer decor.

Said Mr Ismail: "It is likely that the buyers must have liked the decor for them to pay so much COV (cash over valuation)."

He added that buyers looking for flats in this price range are likely to live in private property and looking todowngrade.

"They will have the money to pay from sales of their private property."

Mr Chris Koh, director of property firm Chris International, agreed that such prices are not the norm.

He said: "Such flats will always be the exception. They are likely to be very well-renovated, with the owners spending maybe up to $100,000 on renovations."

Mr Koh added that resale flat prices have probably reached their peak for now and will not increase in the next few years due to the cooling measures introduced last year.

Mr Ismail said high prices can be expected for mature, central estates like Redhill, Tiong Bahru, Queenstown, Bishan and Toa Payoh.

"These areas are attractive because there are many amenities. They are also about 10 minutes from Orchard Road and Shenton Way. People are willing to pay for the convenience," he said.

He acknowledged that $900,000 is high for a flat, but added: "It might seem a lot, but a private property in a mature estate can cost over $2m. If you consider the flat's size, it is still affordable."

Mr Ismail added that instead of buying an executive apartment in a mature estate with $900,000, one could buy:

A private property of about 40 per cent the size in the same location.

A private property with about 65 per cent the size in a newer estate like Sembawang or Tampines. An executive flat in a newer estate, with $350,000 left to spare.

Resale prices of HDB flats rose in the first quarter of this year, but at a lower rate than in the previous quarter, according to flash estimates released by HDB.

Resale flat prices inched up by just 0.6 per cent, less than half the previous rise. More details will be made available on April 27.

To meet demand, HDB is offering 25,000 build-to-order flats this year.

Flash estimates by the Urban Redevelopment Authority showed a 0.1 per cent decline in the price index for private homes in the first quarter of this year, compared with a 0.2 per cent increase in the fourth quarter of 2011.