HDB resale market stabilising, analysts say

SINGAPORE — The number of resale flats changing hands in the public housing market took a tumble last month while prices inched up, but such month-to-month fluctuations aside, market watchers say that the Housing and Development Board (HDB) resale market appears to be stabilising on the whole, with prices largely unchanged and transaction volume up from the same period last year.

In the latest flash figures from SRX property released yesterday (Dec 3), 1,467 HDB resale flats were transacted last month, down nearly 16 per cent from 1,745 units the month before, which had set the record in terms of monthly volume for the year so far.

But SRX data showed that resale volume is up 8.7 per cent from a year ago — a sign that buyers and sellers are willing to enter the market amid recent policy changes and grant introductions, said industry experts.

Resale prices for HDB flats increased by 0.4 per cent last month, led mainly by a 0.5 per cent increase in prices paid for four-room flats and a 1.4 per cent climb for five-room flats.

Prices for three-room and executive units became more attractive to buyers, after falling by 0.7 per cent and 0.2 per cent respectively.

Year on year, prices dropped by 1.9 per cent last month. Prices have also declined by 11.3 per cent since the peak in April 2013.

Commenting on the numbers, industry insiders said that HDB resale prices appear to be stabilising, with overall month-on-month fluctuations of less than 1 per cent throughout the year.

Also pointing towards a stabilising market is the median Transaction-Over-X-Value (TOX) for last month, which was zero.

This meant that on the whole, home owners bought their resale flats at the same price as SRX Property’s estimated market value.

Real estate agency ERA’s key executive officer Eugene Lim said: “The overall market is not trading at cash premiums above valuation. This is a good sign of stable market conditions,” he said.

Commenting on the increase in resale transaction volume from last year, he said: “This is a clear sign that increasingly more buyers are attracted to the resale market as prices have largely stabilised.”

Mr Quintino Lee, deputy head of the business unit at Knight Frank, noted that market valuation continues to hover around the lower side, and he expects prices to stay put till the end of next year.

Meanwhile, analysts felt that the drop in transaction volume was unsurprising.

Mr Lim pointed out that the HDB launched a bumper crop of 12,411 flats in the Build-To-Order (BTO) and Sale of Balance Flats exercise last month. “Typically, in the respective months that coincide with HDB’s launches, resale volumes are affected in some way or other,” he said.

HSR Group chief executive officer Jeffrey Hong pointed out that resale flat deals take about two-and-a-half months to be sealed, and most buyers would prefer not to be bogged down with moving during the Lunar New Year festivities next February.

He expects the transaction volume to pick up in February.

“Everyone’s in a festive mood now, so the market is quiet. They’ll also take time to digest the results of the BTO launch last month, and jump back into the (resale) market, if they don’t get a house in that exercise,” he added.