http://www.businesstimes.com.sg/real...ch-up-02-in-q4

HDB resale prices inch up 0.2% in Q4

Latest data brings full year change to a 1.5% decline, shows signs of stabilisation after 2014's 6% contraction

By Lee Meixian

[email protected]

@LeeMeixianBT

Jan 5, 2016


AFTER nine months of decline, public housing resale prices in Singapore rose 0.2 per cent in the fourth quarter of 2015 over the third quarter, although it remains to be seen if this uptick is sustainable.

The latest data was according to flash estimates released by the Housing & Development Board (HDB) on Monday. It brings the decline in resale flat prices for the whole of 2015 to 1.5 per cent.

This shows signs of stabilisation, on the heels of a 6 per cent price contraction in 2014. PropNex chief executive Mohd Ismail said: "Though we expect resale prices to be flat in 2016, it may have already reached a bottoming-out level in Q3 2015.

"HDB prices are going through a period of consolidation with marginal price movements as compared to 2014 when overall resale prices slid 6 per cent.

"2016 may spring a surprise as the current price points will entice more buyers to enter the market as it is attractive enough for young couples and upgraders. 2016 will probably see a flat price movement of about -1 to 2 per cent, with volume exceeding 20,000 units due to the lower asking prices."

This will be a increase from 2015. According to SRX Property, 16,360 flats were transacted for the first 11 months of 2015.

Following this stabilisation in HDB resale prices, JLL national director of research and consultancy Ong Teck Hui said HDB owners would now be more confident about upgrading into private condominiums and this could have a positive spillover effect on the private suburban condo market.

"If this trend continues, it could lead to the stabilisation or perhaps recovery in the private suburban market. The HDB resale market has been said to be the 'floor' of the private residential market. It will be interesting to see if this old adage comes true," he said.

Last week, Minister for National Development Lawrence Wong said that after falling over the past few years and stabilising in recent months, HDB resale prices are now at 2011 levels, with more than half of resale flats transacting at close to their market value.

ERA Realty key executive officer Eugene Lim said: "This increased price stability could be pointing to a new equilibrium, indicating that the market may have found its footing.

"The current cooling measures affecting the HDB market are likely to continue being in place as this soft landing is what the government had in mind."

Measures that continue to sap demand from the HDB resale market include:

a mortgage servicing ratio cap of 30 per cent;
a maximum loan term of 25 years for HDB mortgage loans;
a three-year waiting period for new permanent residents before they can buy resale HDB flats;
allowing singles to buy two-room build-to-order (BTO) flats in non-mature estates
some 18,000 new BTO flats to be launched in 2016, more than the 15,000 in 2015.

R'ST Research director Ong Kah Seng said the latest price movement is not a definite sign that prices will consistently and significantly recover from here. Slight increases and decreases will probably occur throughout the year, though still around the 0-per-cent mark.

"At least two quarters of similar price performance are needed to pinpoint a trend, otherwise it may be a statistical blip or random occurrence etc," he said. This means that a price increase in Q1 2016 is needed to indicate a sure recovery.

More detailed public housing data for the full fourth quarter will be released on Jan 22, 2016.

HDB added that its first BTO exercise in 2016 will offer about 4,150 flats in Bidadari, Bukit Batok and Sengkang in February.