July 19, 2007

Prices at 8 HDB towns up by 5% or more

But second-quarter figures from two agencies show some estates yet to pick up

By Jessica Cheam

THE long dormant public housing market has bounced back with a vengeance, although some areas remain sluggish.

New figures from property agencies show that prices of flats sold in Queenstown, for example, shot up by 11.8 per cent on average in the second quarter over the first quarter.

Another hot spot was the Kallang/Whampoa area, which was in second place with a 10.2 per cent rise.

As many as eight Housing and Development Board (HDB) estates registered quarterly price rises of 5 per cent or more on average.

Prices in Ang Mo Kio, Serangoon and Marine Parade grew by about 7 to 9 per cent. One 116 sq m sea-view flat in Marine Parade sold at a record of $695,000 for the area.

Property agency PropNex's chief executive Mohamed Ismail said the strong upswing in prices was not surprising as many buyers, cash-rich from recent collective sales, were paying premium prices for HDB flats in prime locations, or with good views.

Other estates such as Clementi, Bukit Merah, Jurong East and Bishan also posted a healthy growth of about 4 to 6 per cent.

One executive flat in Queenstown sold for $628,000, well above the average of $559,000 for the area.

These figures were released to The Straits Times yesterday by two of the largest property agencies ERA Singapore and PropNex. Both claimed to have a 30 to 40 per cent share of the HDB market.

The agencies say they give a clearer picture of recent HDB price movements.

This follows HDB's unexpected move on Monday to disclose average resale prices and the average cash-over-valuation (COV) - the sum paid over market valuation - of flats by region on its website www.hdb.gov.sg

Property experts expressed misgivings over the HDB figures, which were grouped according to five clusters of towns, instead of individual towns. 'The figures may not be the true reflection of what the current market is willing to pay for specific estates,' said Mr Ismail.

For example, the overall average COV for the West region is $7,400, but in Clementi, the current average market price is $20,000 over valuation, he said.

The property agencies' figures show that some areas are still sluggish. One group of estates, which includes Bedok, the Central area and Geylang, had slower growth at about 1 to 3 per cent. Prices at other towns such as Bukit Batok, Pasir Ris and Yishun hardly moved.

Mr Ismail said this was probably because the 'excitement and price awakening' of the second quarter had not reached the outskirts yet. He expects prices in most HDB towns to move upwards in the third quarter.

One effect of the new statistics released from the agencies and HDB is that they serve as a reality check for sellers currently demanding unreasonably high prices due to 'headline' sales reported in some areas recently, analysts say.

A five-room flat in Bukit Merah, for example, sold for a mind-boggling $720,000 recently. But the average price for such flats is far lower at $467,000.

ERA assistant vice-president Eugene Lim said sales volumes could have been higher if not for flat-owners looking to 'catch on the initial euphoria'.

Buyers and sellers are now beginning to digest the deluge of information. But 'it will take a few weeks for the dust to settle', and for the market to see the real effects, said Mr Lim.

An HDB spokesman said yesterday that it is monitoring the market very closely, and will assess the need to provide such data on a regular basis.

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