The Business Times
Lynette Khoo
Stronger signs of stabilising resale prices for Housing & Development Board (HDB) flats were reflected in the latest flash estimates by SRX Property in February, which showed resale prices inching up 0.2 per cent from a month ago.
The increase was seen in both mature and non-mature estates where resale prices rose by the same magnitude. On the whole, however, HDB resale prices were still 0.6 per cent lower than a year ago and 10.9 per cent below the peak in April 2013. There was no revision for SRX Property's price index tracking HDB resale prices in January, which dipped 0.5 per cent month on month.
ERA Realty key executive officer Eugene Lim felt that the signs are becoming clearer that resale HDB prices have largely stabilised over the last two years and may have bottomed out.
But for flat sellers, it would be a mistake for them to conclude that the market is on the rebound and as such increase their asking prices, he said.
"In the months ahead, the headwinds remain strong and though we may see month-on-month increases for the different flat types from time to time, the possibility of a runaway price increase is very remote," he added. "Most buyers continue to be guided by the latest transacted prices when making their offers to purchase flats. Their primary concern is that the purchase price be supported by valuation."
R'ST Research director Ong Kah Seng noted that HDB resale flat prices are on a "flattish pricing mode" given their "new founded and strongly supported stability", but they aren't anywhere near a sustainable price increase.
Buyers will not accede to higher asking prices from sellers due to the mortgage servicing ratio of 30 per cent which restrains large loans, he said.
SRX Property flash estimates showed that the month-on-month resale price increase in February was led by smaller flats. Resale prices of three-room and four-room flats increased by 0.2 per cent and 0.8 per cent respectively, while the resale prices of five-room and executive flats declined by 0.1 per cent and 0.7 per cent respectively.
Based on records on HDB's website, The Pinnacle @ Duxton saw six four-room resale flats transacted within S$850,000-S$988,000 in February. In January, two five-room resale flats there on 28-30 storeys were transacted above S$1 million.
As expected, resale volumes in February dipped from January, owing to the Lunar New Year festive period. HDB resale data compiled by SRX Property showed that 1,200 HDB resale flats were sold last month, down 6.7 per cent from January but up 4.5 per cent from a year ago.
Mr Lim said he expects resale volumes to pick up from March and a good run for the HDB resale market in the March-July window before the Hungry Ghost month sets in. "Prices are very stable now and the resale HDB market is the go-to solution for buyers that cannot wait for BTO (build-to-order) flats to be completed or are not qualified to buy BTO flats."
The HDB is launching a total of 18,000 new BTO flats this year. Half of the new flats will be in mature estates, up from one-third last year.
Mr Lim pointed out that new launches in mature estates favour mostly the first-timers as 95 per cent of the BTO flat supply in mature estates are set aside for them. Consequently, the demand for HDB resale flats in mature estates would hinge more on non-first timers and also Singapore's permanent residents population that have crossed the three-year wait-out period.
Looking for HDB Resale properties, check out srx.com.sg/hdb
Original article was published on The Business Times