More HDB resale flats change hands as prices dip

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More HDB resale flats change hands as prices dip

Prices continue to decline because of cooling measures, say experts

Published on Apr 10, 2015 1:38 AM

By Janice Heng


THE number of Housing Board flats sold on the resale market rose last month as prices fell 0.8 per cent, according to flash figures released by SRX Property yesterday.

There were 1,349 flats resold last month, up from 1,148 in February - a rise which experts said was probably seasonal. However, they expect more resale flats to change hands this year than last year, when transactions were at a record low.

ERA Realty key executive officer Eugene Lim said: "With the Build-To-Order programme slowing down this year and the continued stabilising of resale HDB prices, we are hopeful that more would choose to buy from the resale HDB market."

According to SRX Property's index, resale prices are now 6.6 per cent lower than a year ago.

Last month's price fall was driven by the decrease in prices of three-, four- and five-room flats by 0.9 per cent, 1.1 per cent and 0.5 per cent respectively. Resale executive flat prices, however, rose 1 per cent.

Flats in mature and non-mature estates saw prices fall by 0.9 per cent and 0.8 per cent respectively.

HDB resale prices have fallen every month since February last year, interrupted only by a 0.2 per cent rise in January this year. The continued decline is due to cooling measures such as loan curbs, said experts.

ERA's Mr Lim expects prices to fall by 5 per cent to 6 per cent this year. R'ST Research director Ong Kah Seng expects a fall of up to 4 per cent in the first half, with prices then stabilising if cooling measures remain. As prices fall, buying interest could pick up, he said.

Last month's resale volume was still 5 per cent lower than the 1,420 units resold in March last year.

Mr Lim said: "The pick-up in volume was largely expected to happen from March after the Chinese New Year festivities."

If the momentum lasts through July, before the traditionally slow Hungry Ghost Month in August, the market will be on track to better last year's low of 17,318 transactions, he said. Some 18,000 to 20,000 flats could change hands for the year.

But OrangeTee manager of research and consultancy Wong Xian Yang is not expecting volumes to rise in the next few months.

"Historically, we see volumes peaking in March, before slowly tapering off in the months leading to June," he said.

For seller Jeffrey Tng, 49, the weak market has him in a bind.

"It's either you sell it at a loss, or you have to forfeit the deposit," the project manager said.

He will have to sell his current Serangoon five-roomer, a resale flat he bought 15 years ago, in order to collect the keys and move into his new five-roomer.

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More HDB resale flats sold in March as prices continue to dip

One analyst says pick-up largely expected from March after CNY lull

By Lynette Khoo

[email protected]@LynetteKhooBT

10 Apr


MORE HDB resale flats were sold in March as resale prices continued to fall, according to flash estimates by SRX Property.

Based on HDB resale data compiled by SRX Property, 1,349 HDB resale flats were sold in March, a 17.5 per cent increase from 1,148 transacted units in February. This is still 5 per cent less than the 1,420 resale units sold in the same month last year.

SRX's flash estimates showed a 0.8 per cent dip in HDB resale prices from a month ago and 6.6 per cent from a year ago.

If the estimates are anything to go by, HDB resale prices would have dropped 1.8 per cent so far this year and 11.1 per cent from SRX's HDB resale price index's peak in April 2013. With more data available for February, SRX also revised the month-on-month price change for February to a 0.5 per cent decrease from an earlier reported 0.6 per cent decrease.

ERA Realty key executive officer Eugene Lim noted that the pick-up in transactions was largely expected to happen from March after the Chinese New Year festivities in February.

"Should the momentum continue throughout the window of March-July (five months) before onset of the Hungry Ghost Month in August, we would have a good build-up for resale HDB transaction volume to hopefully better last year's all-time low volume of 17,318," he said. "The second window of September to November of three months is a much shorter window before the year-end holiday season when things slow down again."

"With the Build-To-Order programme slowing down this year and coupled with the continued stabilising of resale HDB prices, we are hopeful that more buyers would choose to buy from the resale HDB market," he added. "If this happens, we may see total volume of 18,000-20,000 units by year-end."

Going by SRX data, price declines of 0.9 per cent, 1.1 per cent, and 0.5 per cent were seen across three, four and five-room flats, respectively, with the exception of executive flats whose resale prices rose one per cent in March.

SRX sub-indices for HDB resale prices showed price declines of 0.9 per cent and 0.8 per cent in both mature and non-mature estates. But resale transaction volumes improved.

R'ST Research director Ong Kah Seng pointed out that prices of smaller flats were more resilient during the immediate period after the lending cap under the mortgage servicing ratio (MSR) was lowered for public housing in August 2013. But demand for three-room flats started showing weakness last year as the pool of buyers looking for smaller-sized flats have shrunk.

Mr Ong believes buying interest could pick up when a so-called "equilibrium" is reached around mid-2015 where prices have indeed come down to a more affordable level. But HDB resale prices will remain capped by the MSR that limits borrowing to 30 per cent of gross monthly income, he said.

OrangeTee manager for research and consultancy Wong Xian Yang said HDB resale prices may become supported should the HDB income ceiling be raised. "The raising of the income ceiling should direct more demand towards the HDB resale market, as some first-time buyers who were previously ineligible for the grant might now choose to buy a resale flat over a private property due to the attractive CPF housing grant."