HDB resale prices dip 0.1% in Q2; market seen stabilising

Analysts expect flat resale price trend and increase in resale transactions for whole of 2017

July 4, 2017

LEE MEIXIAN


RESALE prices for public housing dipped 0.1 per cent in the second quarter, moderating from a 0.5-per-cent decline in the first quarter of the year.

Analysts continue to see a stabilising trend in the resale housing market, with increased transactions as well as a steady supply of build-to-order (BTO) flats moderating price movements. They also anticipate a flattish price trend for the full year.

The Housing and Development Board (HDB) released the flash estimates for its resale price index on Monday. Resale prices are now 0.7 per cent lower than the same period a year ago.

Ong Teck Hui, national director for research and consultancy at JLL, said: "(HDB resale prices) have been fluctuating over the last seven quarters but with decreases predominantly, which shows that prices are still on a mild downtrend.

"The sustained supply of new build-to-order flats for sale will continue to keep resale prices in check as they provide more affordable options, especially for first time buyers."

ERA key executive officer Eugene Lim added that the latest numbers reinforce his view that the HDB resale market has already stabilised and that the previous quarter's larger-than-expected price decrease was a one-off occurrence.

"As prices have been flattish since Q4 2015, increasingly more buyers are entering the resale market. With the increased demand, any price decline is expected to be very marginal."

He expects resale transactions to further pick up in Q2 2017 from Q1 2017 - when there were 4,530 resale flat applications.

Data for the full second quarter, including for the number of resale transactions, will only be released on July 28.

Mr Lim noted that about 3,815 resale flats have already been transacted in April and May.

"Resale flats have always been a popular choice among home buyers due to the variety of locations available and the generous grants. In addition, unlike new flats where there is a waiting time of three years, resale flats are ready for immediate occupation and will suit those that have more urgent housing needs.

"The maximum grant amount available to first timers is now up to a maximum of S$110,000," he added, referring to a family grant of up to S$50,000 plus an additional housing grant up to S$40,000 and proximity housing grant of S$20,000.

For the whole of 2017, he expects the price change to be between negative 0.5 per cent and 0.5 per cent, with transactions of 21,000 to 22,000 units."

For comparison, in 2016, the number of resale transactions was 20,813, up 7.8 per cent from 19,306 cases in 2015.

HDB added that in August this year, it will offer about 3,850 BTO flats in Bukit Batok and Sengkang for application.