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HDB resale volume up 27.8% amid price falls

PropertyGuru

Resale prices of HDB flats dipped 0.4 percent in the second quarter of 2015 from 1.0 percent in the previous quarter, or its eighth consecutive quarter of decline, according to latest data from the housing board.

The falling resale prices are due to the potent combination of the governments measures to stabilise the public housing market such as, reducing the Mortgage Servicing Ratio (MSR) cap of 30 percent and the maximum loan term of 25 years for HDB mortgage loans, three-year wait for new PRs before they can buy resale HDB flats, and allowing singles to buy two-room BTO flats in non-mature estates, explained PropNex Realty CEO Mohamed Ismail.

Ismail also attributed the drop in prices to the increased Build-to-Order (BTO) supply. He noted that the sale of balance flats (SBF) also offers first- and second-time buyers a good number and variety of choices.

The lower prices may have lured buyers back to the HDB resale market as transaction volume climbed 27.8 percent from 4,135 units in Q1 2015 to 5,286 last quarter.

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Meanwhile, the number of applications approved for subletting HDB flats rose 1.2 percent from 10,385 cases in Q1 to 10,510 cases in Q2. As at 30 June, 49,480 units were being sublet, up 2.4 percent from 48,338 units in Q1.

HDB also revealed that 13,426 flats were offered for sale during the first half of 2015, of which 8,039 were BTOs and 5,387 were balance flats.

In Septembers BTO exercise, HDB said about 4,860 flats in Punggol Northshore and Bidadari will be launched, while another 4,000 flats will be offered in a concurrent SBF exercise.

Looking ahead, Ismail expects HDB resale prices to continue falling by around three to four percent for full-year 2015, given the large influx of flat completions from next year and the continued enforcement of cooling measures.

He also expects the resale transaction volume to reach 19,000 to 20,000 units due to lower asking prices, up from 17,318 transactions last year.

Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg

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