HDB resale prices fall for third quarter in a row

SINGAPORE — Resale flat prices have fallen for the third consecutive quarter, as various measures, including loan curbs and the strong supply of new flats, continue to weigh down on demand.

The Housing and Development Board’s (HDB) flash estimates showed the Resale Price Index (RPI) in the first quarter fell to 198.6, the first time it had dipped below 200 since the third quarter of 2012.

The index has also slumped 1.5 per cent in each of the last two quarters, which is the sharpest decline in close to nine years.

The RPI hit a historic high of 206.6 in the second quarter last year, but has since tumbled by 3.9 per cent.

ERA Key Executive Officer Eugene Lim said the large numbers of Build-To-Order (BTO) flats released, which throw up more choices for buyers, as well as the Government opening up new two-room flats in non-mature estates to singles have dampened demand in the resale market.

But resale flats could regain their appeal “as prices continue to moderate, and buyers and sellers get used to negotiating based on price and not COV (cash-over-valuation)”, he noted.

Mr Lim was referring to the changes to the resale procedure announced on March 10, requiring buyers and sellers of resale flats to agree on a price before getting an official valuation. Previously, prices could exceed valuation figures if the buyer was willing to fork out extra.

Since the change, housing agents have been unable to capture COV figures because the HDB releases the valuation figure only after the buyer and seller agree on a price, said PropNex Realty Chief Executive Officer Mohamed Ismail.

Figures from his firm and the Singapore Real Estate Exchange, which TODAY understands are up till March 15, showed that median COV has fallen for five consecutive quarters, from S$33,000 in the last quarter of 2012 to zero in the first quarter of this year.

Data from the first quarter showed that HDB resale flats in Sembawang, Punggol and Sengkang saw negative COV of between S$5,000 and S$10,000. Estates which recorded the highest COVs are Bishan (S$15,000), Bukit Merah (S$12,000) and Queenstown (S$10,500).

Mr Ismail said the data was able to include some deals that were closed after the new rule kicked in because the buyers and sellers had relied on HDB valuations released just before the change.

In response to TODAY’s queries, the HDB said their decision on whether to continue publishing the COV data will be made known when they release the Public Housing Data report for the first quarter.

Correction (7pm, April 2, 2014): In an earlier version of this article, it was reported that cash-over-valuation (COV) data will be published in the Public Housing Data report for the first quarter. HDB has clarified that their decision on whether to continue publishing the COV data will be made known when they release the Public Housing Data report for the first quarter.