HDB resale prices fall for 11th straight month in December

SINGAPORE — Resale prices of Housing and Development Board (HDB) flats dipped 0.4 per cent last month, marking 11 consecutive months of decline, with property analysts expecting the trend of low prices and fewer flats being resold to continue in the coming months.

A flash report by the Singapore Real Estate Exchange (SRX) showed that prices were at a 41-month low since August 2011 and had declined 10 per cent since prices peaked in April 2013.

The SRX Property Price Index was driven down by four- and five-room flats, which saw prices slip 0.7 per cent and 0.3 per cent, respectively.

On the other hand, prices for three-room flats held steady, while executive flat prices gained 1.8 per cent.

The HDB resale data compiled by SRX Property showed 1,295 flats were sold last month, down 4.1 per cent from the 1,350 units transacted in November. However, more flats changed hands compared with the 1,012 units resold in December 2013.

While property analysts attributed the declining resale prices and volume to the annual year-end lull, they also expect continued declines in the next few months as flat owners put off buying and selling until after Chinese New Year.

Mr Chris Koh, director of Chris International, said prices of four- and five-room flats are expected to come down since more home owners are choosing to upgrade, making them more eager to sell their flats and consequently increasing the supply of these larger flats in the market.

Even as the Mortgage Servicing Ratio — which is capped at 30 per cent of the borrower’s gross monthly income — continues to limit loan size and affect those buying larger flats, property agency ERA’s key executive officer Eugene Lim said: “As we are expecting bank housing loan interest rates to increase this year, we can also possibly expect resale HDB prices to decline further before stabilising. For the whole of this year, we are expecting another 5 to 8 per cent decline in overall prices.”

New sub-indices from SRX Property also showed that flats in mature estates held their prices better than those in non-mature estates.

Non-mature resale flats saw a price drop of 0.9 per cent, while prices for flats in mature estates inched up 0.2 per cent. Since their peak in early 2013, resale prices have fallen 7.4 per cent and 12.4 per cent in mature and non-matures estates, respectively.

“The large supply of Build-to-Order flats has drawn demand away from the HDB resale market and as a result, dampened the prices of resale flats,” said SLP International Property Consultants executive director Nicholas Mak.

“However, with the expected relatively lower supply of BTO flats this year, the HDB prices may bottom or fall at a slower rate if the Government were to relax some of the property curbs.”

The overall median Transaction Over X-Value (TOX) remained negative last month at -S$4,000, which indicated buyers are still paying below the SRX estimated market value.

In HDB towns with more than 10 resale transactions last month, Queenstown posted the highest median TOX, where buyers bought units at S$3,000 above the estimated market value. Units in Ang Mo Kio fetched the lowest prices compared with the estimated market value at -S$19,500.

“This shows there may be more buyers attracted to flats in mature estates as prices continue to stabilise and the days of paying high cash premiums are over,” said Mr Lim.