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16% rise in HDB resale flat transactions, but prices dip

SINGAPORE — More Housing and Development Board (HDB) resale flats were bought and sold in the second quarter of the year compared with the previous three months but prices continued to fall, which analysts say reflect continued pressure from loan curbs and the strong supply of new HDB flats.

The Resale Price Index stands at 195.7, falling for the fourth consecutive quarter to its lowest level in two years. Today file photo

The Resale Price Index stands at 195.7, falling for the fourth consecutive quarter to its lowest level in two years. Today file photo

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SINGAPORE — More Housing and Development Board (HDB) resale flats were bought and sold in the second quarter of the year compared with the previous three months but prices continued to fall, which analysts say reflect continued pressure from loan curbs and the strong supply of new HDB flats.

The number of transactions for HDB flats rose by 16 per cent to 4,389 cases, while prices fell by 1.4 per cent, based on figures for the second quarter released yesterday. The Resale Price Index stands at 195.7, falling for the fourth consecutive quarter to the lowest in two years.

Realtor PropNex, commenting on the latest numbers, said that measures such as reducing the Mortgage Servicing Ratio (MSR) cap of 30 per cent, the maximum loan term of 25 years for HDB mortgage loans, and the three-year wait for new PRs before they can buy resale HDB flats have pushed down resale demand. The move to allow singles to buy two-room BTO flats in non-mature estates has also dampened demand.

“For the first two quarters of 2014, the fall of 3 per cent has already eclipsed the 0.6 per cent registered in the entire 2013, and this sets the stage for further price falls in the year,” they said in a trend report.

Referring to the revised resale procedure introduced in March — where a buyer can request a valuation only after the seller has granted the buyer the option to purchase his flat — they noted this has made buyers more conservative in their offers for fear that the valuation is unable to match the price that they are offering.

ERA key executive officer Eugene Lim said he has observed that more transactions are being supported by valuation, which means more transactions are being done at market value. “We are likely to see moderate quarterly price declines over (the second half of the year),” he added. “Our projection is for resale HDB prices to soften by 5 to 8 per cent over the whole of 2014.”

Meanwhile, the rental market saw a 0.4 per cent dip in the number of transactions in the second quarter to 8,455 cases. This is despite the total number of HDB flats approved for subletting rising slightly by 0.8 per cent to 47,015 units in the same period.

The HDB also said that more flats will be on offer in the second half of the year than the first. In the second half of the year, the HDB will offer another 12,700 Build-To-Order (BTO) flats, as well as about 3,000 flats in a Sale of Balance Flats exercise in November.

This includes 3,841 BTO flats launched in the July BTO exercise. In September, the HDB will offer about 4,510 BTO flats in Bukit Batok, Hougang, Jurong and Kallang/Whampoa.

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