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Thread: HDB resale volume hits four-year high

  1. #1
    Join Date
    Oct 2011

    Default HDB resale volume hits four-year high

    HDB resale volume hits four-year high

    JUL 29, 2017

    Rachel Au-Yong

    Revathi Valluvar

    More Housing Board (HDB) resale flats changed hands in the second quarter of this year - reaching a four-year high, the latest official data showed.

    Analysts said this was due to a confluence of factors, such as increased government grants and a stable resale market that is giving buyers the confidence that prices are unlikely to drop much further.

    Yesterday, the HDB said that the number of resale transactions increased by 32.5 per cent, from 4,530 in the first quarter of this year to 6,001 in the second quarter. The last time transactions for a quarter crossed the 6,000-mark was in the third quarter of 2012, when 6,560 resale applications were registered.

    The latest data also showed that the resale price index dipped by 0.1 per cent from the first quarter of this year to the second.

    Observers said this was in line with the largely stable prices for the past few years. Resale prices have been on a gradual decline since 2013.

    The stability has continued to entice more buyers, especially young couples, into the resale market, PropNex chief executive Ismail Gafoor said.

    Resale volume has been on the rise since the record low of 17,318 in 2014. There were 19,306 sales in 2015 and 20,813 last year. Mr Ismail said he expects transactions to cross the 22,000 mark this year.

    Recently enhanced grants have also helped, he said.

    Earlier this year, the Central Provident Fund Housing Grant was raised to $50,000 for those buying four-room or smaller resale flats, and to $40,000 for those buying five-room or larger resale flats.

    It was previously capped at $30,000 for both categories.

    New buying patterns have also emerged, said experts.

    "Older flats are facing a slowdown in demand as buyers are concerned about the expiring lease," said property consultancy Edmund Tie & Company research head Lee Nai Jia.

    This follows the debate sparked by National Development Minister Lawrence Wong's blog post in March, in which he cautioned buyers of older resale flats against paying high prices on the assumption that such flats would later be acquired by the HDB for future development, and owners compensated at market value.

    Mr Lee said that "larger units near developments that have successfully completed a collective sale are likely to see stronger demand and an increase in price".

    Earlier this week, privatised HUDC estate Serangoon Ville in Serangoon North Avenue 1 was sold for $499 million - the sixth collective deal so far this year.

  2. #2
    Join Date
    Oct 2011


    HDB Q2 resale transactions jump 32.5% despite flat prices

    More homeowners are also subletting, with the number of flats being sublet rising 0.3% to 53,540 units

    July 29, 2017


    PUBLIC housing data for the second quarter (Q2) of the year showed resale flat prices inching down 0.1 per cent - dipping lower than the index in first quarter (Q1). It dwindled from 133.9 in Q1 to 133.7 in Q2.

    Despite that, the Housing and Development Board (HDB) resale market saw a spike in transaction volume in the last quarter, it said in a press release on statistics for its resale and rental market in the second quarter of the year.

    The number of transactions rose by 32.5 per cent to 6,001 in the April to June period, from 4,530 in the period between January and March.

    Head of research at Edmund Tie & Company Lee Nai Jia said that the 0.1 per cent quarter-on-quarter decline in price reflected the varying dynamics in the secondary market for public housing. "Flats in choice locations are in demand and their values may appreciate. Separately, older flats are facing a slowdown in demand as buyers are concerned about the expiring lease. Notwithstanding, larger units near to developments that have successfully completed a collective sale is likely to see stronger demand and an increase in price," Dr Lee added.

    ERA Realty key executive officer Eugene Lim expected demand for resale flats to continue being strong, regardless of the recently introduced shorter waiting time for some Build-To-Order (BTO) flats and the Re-Offer of Balance Flats (ROF) to help young couples get their new homes sooner.

    "This is because there will always be a group of buyers who do not want to wait for a flat, or are looking for a flat in a particular location. Also, many first-timer buyers will want to make use of the considerable grants available to them. These buyers will continue to form a strong support base for resale flats and as such, we are expecting transactions for 2017 to range between 21,000 and 22,000," he said.

    Ismail Gafoor, PropNex Realty CEO, said: "The current price points are indeed enticing for buyers to enter the market, especially so for young buyers and upgraders. The HDB resale segment also witnessed 6,001 transactions this quarter, the highest since the last 18 quarters."

    He predicted that 2017 will probably see "a price movement of about minus-one to plus-one per cent, with volume exceeding 22,000 units due to the lower asking prices".

    More homeowners are also subletting their flats. There were 53,540 HDB flats being sublet as at June 30, an increase of 0.3 per cent from the 53,360 in the first quarter. The number of approved subletting applications also went up by 9.5 per cent from 9,981 to 10,929.

    Mr Lim said that HDB flats remain attractive to tenants who prioritise location over product, as HDB flats offer value. He added that shorter leases are still common, with many tenants opting for a 12-month lease "as they bet on further rental decreases".

    "However, as the supply glut passes in the private residential market, it will only be a matter of time before the HDB rental market starts recovering. This could happen in late 2018 or 2019. For 2017, rental transactions are expected to range from 41,000 to 43,000," he said. In its announcement, the HDB also said that it will be offering 3,850 BTO flats in Bukit Batok and Sengkang and 1,394 unsold balance flats in its first ROF exercise in August. The unsold balance flats were from the Sale of Balance Flats (SBF) exercise last November.

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