HDB resale prices continue to dip but volumes are up

July's 0.6% month-on-month fall follows June's 0.2% drop; property exec says volumes will inevitably support prices

August 4, 2017

Kalpana Rashiwala

PRICES of Housing & Development Board (HDB) resale flats fell 0.6 per cent in July from the preceding month, based on SRX Property's flash estimate for last month released on Thursday.

This follows a month-on-month decline of 0.2 per cent in June 2017.

SRX Property's overall resale price index for HDB flats is down 1.6 per cent year on year, and is also 12.2 per cent below its peak in April 2013.

Year on year, its price index for public housing resale flats in mature estates slipped 0.5 per cent - a smaller decline than the 2.4 per cent drop in non-mature estates over the same period.

Data compiled by SRX Property shows that an estimated 1,785 HDB flats were resold in July, up 1.8 per cent from the 1,753 in June. The figure is also up year on year - 12.2 per cent higher from 1,591.

That said, last month's resale volume was 51.1 per cent below the peak of 3,649 in May 2010.

Wong Xian Yang, head of research and consultancy at OrangeTee, observed that "HDB resale prices have continued to trend lower despite the increase in the CPF Housing Grant for first-timer families buying resale HDB flats, suggesting that buyers retain the upper hand in terms of negotiating power and the number of sellers outweigh buyers".

One source of supply in the HDB resale market would be public housing flat dwellers who are upgrading to an executive condo (EC) unit - ECs are a public-private housing hybrid.

Those who buy a new EC would have to dispose of their HDB flat within six months of key collection. A record 5,485 ECs were completed last year, with another nearly 3,500 slated for completion this year.

"Additionally, the recent launches of BTO (Build-to-Order) projects in mature estates - Bidadari and Geylang - may have diverted some demand away from the resale market."

That said, Mr Wong does not expect an extended downtrend in resale HDB prices as volumes have continued to grow and would inevitably support prices.

"We expect volumes to keep growing, as positive sentiments in the private property market spill over to the HDB resale market."