HDB resale prices up slightly in March, more flats changing hands

[princess_morbucks]

http://www.straitstimes.com/breaking...hands-20140407

Resale prices of Housing Board flats edged up 0.3 per cent in March from a month before, according to Singapore Real Estate Exchange flash figures on Monday. But they were still 4.9 per cent lower than the same time last year.

There were also more transactions in March, with 1,319 resale flats changing hands - the highest volume since last October. This was up from just 951 in February, and comparable to the 1,356 flats sold in the same time last year.

The HDB resale process was changed on March 10, such that valuations could only be obtained after a transaction price was agreed. SRX thus did not release any figures for cash-over-valuation, the cash premium that used to be an important part of negotiations.

But transaction prices were generally $3,000 below SRX's own approximation of valuation, known as X-Value. This negative figure "means people are paying below recent transactions, causing downward pressure on prices," said SRX co-founder Jeremy Lee.

[DC33_2008]

Upgraders trying to sell before price starts to soften as they are committed to ECs or PCs that may be ready in the next 6-12months.

http://www.straitstimes.com/breaking...hands-20140407

[Royston8H]

Gurus during the recent Smart property investment expo advised the audience to sell off their hdb n upgrade to ec n probably buy another commercial before actual hdb price dips greater in 2016. Neutral over this point.

[Arcachon]

Don't understand why HDB price dip.

1. PSF for bigger HDB is higher than smaller HDB.
2. People start to realize HDB after 99 year is Zero value.
3. HDB is building smaller unit.
4. HDB is reducing BTO.
5. HDB delink BTO to resale.
6. Valuation getting less control from HDB.

[reporter2]

http://www.businesstimes.com.sg/arch...olume-20140408

Published April 08, 2014

HDB resale prices edge up, strong rebound in volume

Gains by smaller units offset falls in prices of larger flats in March

By Lynette Khoo [email protected]


RESALE prices of Housing and Development Board (HDB) flats crawled slightly higher last month as price increases in smaller units offset the declines in larger ones, going by the latest data from the Singapore Real Estate Exchange (SRX).

But transaction volumes staged a strong rebound as buyers returned to the resale market after the Chinese New Year lull.

Flash estimates by SRX showed HDB resale prices edged up 0.3 per cent in March from a month ago. Prices for three- and four-room units rose by 0.5 per cent and 0.8 per cent, respectively as more buyers sought units with smaller quantums, given the loan cap under the Mortgage Servicing Ratio (MSR).

Prices of larger flats, however, softened by 0.2 per cent for five-room units and 0.7 per cent for executive flats from a month ago.

Overall HDB resale prices slipped 4.9 per cent year-on-year in March, SRX flash estimates show.

The total number of resale transactions, however, jumped 40 per cent from February's 951 units to 1,319 in March - the highest monthly volume observed since October.

OrangeTee managing director Steven Tan noted that more home buyers prefer to wait until after the Chinese New Year lull period before house-hunting.

Some buyers are also "lured back to the resale market by the low cash premium they have to pay due to weak market sentiment", he added.

Property consultants are encouraged by the latest data from SRX, expecting that resale activity will pick up though prices might correct further.

"With this trend continuing, we may see transaction volume increase in the coming months as more buyers come back to the resale market in view of stabilising prices," said ERA Realty key executive Eugene Lim. He sees the rental market under pressure from new supply of completed private homes.

HDB data showed an estimated 1,627 flats being rented in March - the highest rental volume in eight months, while overall median rental prices remained flat at $2,300 for the fourth consecutive month.

This is the first time SRX is not publishing flash estimates for cash-over-valuation (COV) following its introduction of the X-value two weeks ago, which estimates the value of a property based on past transacted prices of comparable units.

The introduction of X-value came shortly after HDB tried to turn off the spotlight on COV by changing its resale process, requiring buyers to sign the option to purchase first before getting a valuation.

SRX rolled out another price indicator yesterday - TOX or transactions over X-value - that looks at how much buyers pay over the X-value.

The median TOX for the HDB resale market in March stood at negative $3,000, which means that buyers are paying below recent transacted prices.

"Like the COV, TOX is a forward indicator on how heated the market is," said Jeremy Lee, co-founder of SRX, adding that SRX will start providing the median TOX by HDB towns and property types next month.

Sam Baker, co-founder of SRX, pointed out that TOX is a "neutral measurement" that is forward-looking but will not lead to prices spiralling higher or lower because the underlying X-value is based on past transactions.

In tandem with the negative TOX value, market watchers are expecting a downward trend in HDB resale prices.

"The trend is still towards a softening in resale prices at about 1-2 per cent per quarter as considerable demand for resale flats has already been siphoned to new build-to-order (BTO) flats while the MSR squeezes on affordability," said Ong Teck Hui, national director of research and consultancy at JLL.

Ong Kah Seng, director at R'ST Research, predicts a soft landing of resale HDB prices with a maximum 5 per cent fall for the full year, as the MSR will continue to limit the pool of eligible buyers while there will be more supply of resale flats in the second quarter.

There have been more than 60,000 requests for the X-value since its launch two weeks ago, according to SRX's Mr Lee. SRX will release the median TOX for the private residential market by district and property type next week.

Mr Lee noted that the X-value has closely tracked actual valuations so far, with about 98 per cent of all HDB resale transactions this year within a 10 per cent deviation from the actual valuations and about 81 per cent of transactions are within a 5 per cent deviation.

SRX will roll out the X-value in Hong Kong by June based on data from the Hong Kong Land Registry.

[phantom_opera]

strong volume means buyers/sellers both agree a price drop of 5% and low COV is good enough to start transact again

[reporter2]

http://www.straitstimes.com/breaking...hands-20140407

http://www.straitstimes.com/archive/...march-20140408

Slight rebound in HDB resale market in March

Published on Apr 8, 2014

By Rachel Au-Yong


AFTER four months of festive chill, the resale public housing market warmed ever so slightly last month.

Prices rebounded by 0.3 per cent and transactions climbed to 1,319, the highest since last October, according to Singapore Real Estate Exchange (SRX) flash figures yesterday.

But hopes that prices have bottomed out may be premature, said experts. "It's not time to bring out the champagne yet," said SLP International research head Nicholas Mak.

The minor uptick is due to the fact that November to February are known to be slower months in the housing market. Buyers and sellers are often preoccupied with Christmas, the start of the school year and Chinese New Year.

"Buying interest in March was fairly pent-up as the festive season did not provide enough choices," said R'ST Research director Ong Kah Seng.

But last month's increased interest was not spread out evenly across housing types.

The overall rise in resale prices was due to rising prices of three- and four-room flats, by 0.5 and 0.8 per cent respectively. This more than made up for the 0.2 per cent fall in five-room flat prices and the 0.7 per cent fall in executive flat prices.

Overall resale prices last month were still 4.9 per cent lower than at the same time last year.

Loan curbs have reduced the pool of buyers who can afford larger flats, but fuelled demand for smaller ones, said Chris International director Chris Koh.

"Expectations have fallen," he said. "March's activity is pent-up demand from such people waiting on the sidelines. So things have picked up, but I would not say they have stabilised."

Even so, the Housing Board rental market also showed signs of thawing. An estimated 1,627 flats were rented in March, the highest in eight months, but still 8.6 per cent lower than at the same time last year. Median rental prices remained at $2,300 for the fourth month in a row.

SRX did not release figures for cash premiums this time, after the HDB resale process was changed on March 10. Now, valuations can be obtained only after a transaction price has been agreed upon.

However, transaction prices were about $3,000 below SRX's own approximation of valuation, known as X-value.

This negative figure "means people are paying below recent transactions, causing downward pressure on prices", said SRX co-founder Jeremy Lee.

The downward pressure is expected to continue, with more than 6,000 HDB dwellers receiving the keys to new flats this year. This is double last year's figure, and does not include HDB upgraders purchasing flats on the resale market or in private residences.

"It's too early to say if the HDB market is on the uptrend. We have to see how the next three months play out," said Mr Mak.

[email protected]

[Arcachon]

strong volume means buyers/sellers both agree a price drop of 5% and low COV is good enough to start transact again

Interesting, why not strong volume means buyers/sellers both agree price increase.

Flash estimates by SRX showed HDB resale prices edged up 0.3 per cent in March from a month ago.