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HDB resale prices hit 2-year high in April

SINGAPORE — After a steady decline in Housing and Development Board (HDB) resale prices, there are signs that the market is bottoming out as its transaction volume hit a two-year high last month.

SINGAPORE — After a steady decline in Housing and Development Board (HDB) resale prices, there are signs that the market is bottoming out as its transaction volume hit a two-year high last month.

As more upgraders let go of old units, new launches of Build-to-Order (BTO) flats subside, and sellers’ expectations become more realistic, prices are likely to stabilise by the second half of the year, the analysts said.

Figures released by the Singapore Real Estate Exchange (SRX Property) today (May 7) showed 1,610 HDB flats changing hands last month, up 19.3 per cent from March’s 1,349 units, and the highest since April 2013.

This came as resale prices rose 0.2 per cent month-on-month after dipping by 0.8 per cent in March.

Last month saw the price tags of three- and four-room flats going up by 0.3 and 0.9 per cent, respectively. Prices for five-room and executive flats, however, fell by 0.8 and 2 per cent, respectively.

Chief executive of real estate firm Century 21 Ku Swee Yong said the increase in resale volume may be driven by the large volume of newly-completed BTO flats and executive condominiums (ECs).

“Volume up is a good and healthy sign ... this will likely be the case for the next two to three years as more and more second-timers collect keys to their new flats or ECs,” he added.

Property consultancy Chestertons’ managing director Donald Han said although the pick-up in volume may signal the market’s bottom is in sight, it may be “a long-drawn bottoming out process”.

Mr Eugene Lim, key executive officer of real estate agency ERA,  noted that the March-to-July window is “critical” in determining the pace of resale transactions before the Hungry Ghost Festival sets in. The pick-up in resale volume can be attributed to stabilising resale prices and a slowdown in BTO launches, he said.

Mr Lim and Mr Chris Koh, director of property firm Chris International, expect prices to decline moderately in the coming months before stabilising.

“What we see now is a market correction as buyers who were waiting for prices to drop are coming back into the market, after seven quarters of decline since 2013. Price will likely drop slightly in the next quarter, then plateau out,” said Mr Koh.

Century 21’s Mr Ku, however, said last month’s price hike is not statistically significant. “0.2 per cent could fall within the margin of statistical error, so I would at best conclude that the market is flat,” he said.

SRX Property’s report also showed that overall median Transaction Over X-Value (TOX), which measures whether buyers are overpaying or underpaying SRX Property’s estimated market value, remained negative at -$2,000, up from -S$3,000 in March.

This indicates that HDB prices continued to face downward pressure and negative market sentiment, the report said.

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