Published March 27, 2007

HDB upgraders priced out of new property launches

2006 is first time they buy more homes from secondary market


HDB upgraders appear to be priced out of the private housing market, when it comes to new launches by developers, according to DTZ Debenham Tie Leung's latest analysis of caveats.

The Centris: One of 2 projects with highest proportion of HDB upgraders among buyers

The number of private homes bought by those with Housing & Development Board addresses actually rose 9 per cent last year to 5,871.

However, HDB dwellers' share among private home buyers last year fell to 28 per cent - the lowest level since 1995.

Of the 5,871 transactions, 87 per cent or 5,126 were for private apartments/condos.

DTZ says that the falling share of HDB upgraders was due to a decline in their purchase of private apartments/condos from developers, brought about by higher property prices for new launches which priced HDB upgraders out of the private housing market.

In addition, existing low HDB resale flat prices, together with the fact that numerous HDB dwellers had bought their flats from the resale market at much higher prices, served to deter HDB dwellers from selling their flats and thus clipping their ability to upgrade to a private home.

The number of private condos/apartments purchased by buyers with HDB addresses from developers in the primary market dipped 3 per cent last year to 2,306.

However, the number of condos/apartments that HDB upgraders bought in the secondary market last year increased by 21 per cent to 2,820 units - the highest since 1999.

This meant that 55 per cent of the private apartments/condos bought by those with HDB addresses in 2006 were picked up from the secondary market.

According to DTZ, this was the first year that HDB dwellers bought more non-landed private homes from the secondary market than they did from the primary market.

DTZ notes that there was no dearth of mass-market condo projects launched by developers last year, such as The Raintree, The Quartz and The Centris.

However, some projects that were well-positioned and strategically located achieved notable price increases. This encouraged HDB upgraders to find their dream condo or private apartment in the secondary market, including properties that have been recently completed and offer immediate occupation.

'Moreover, as these properties had been launched at lower prices during the property market downturn, they are still generally cheaper than new projects even if prices have increased.'

District 15 was the most popular among HDB upgraders who bought non-landed private homes in the primary market last year. Examples include One Amber and The Esta in Katong.

However, the projects that saw the highest proportion of HDB upgraders among its buyers in 2006 were The Centris in Jurong (66 per cent), and The Quartz near Buangkok MRT Station (86 per cent).

District 15 was also the top pick for HDB upgraders who turned to the secondary market to buy non-landed private homes, followed by Districts 23, 16, 18 and 19.