HDB resale prices, deal volumes slip in May: SRX

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http://www.businesstimes.com.sg/arch...y-srx-20140606

Published June 06, 2014

HDB resale prices, deal volumes slip in May: SRX

Resale prices down 1.2% for a fourth month while number of deals fell 11.1%

By Lynette Khoo

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BOTH HDB resale prices and transaction volumes slipped in May compared to a month ago, weighed down by the mortgage limit for public housing and greater supply of housing units.

In a fourth straight monthly decline, HDB resale prices slipped 1.2 per cent in May to a two-year low as resale prices of all flat types fell last month.

The decline was sharpest for HDB executive flats that saw a 2.8 per cent fall in resale prices, according to the HDB flash report by SRX.

The number of resale transactions also shrank by 11.1 per cent from April to 1,320 flats in May, SRX data shows, suggesting that the 4.4 per cent month-on-month rise in April was a blip.

OrangeTee research head Christine Li noted that potential resale flat buyers could have turned to Sale of Balance Flats (SBF) as such flats are almost ready or ready for occupation and are cheaper than resale flats.

The 3,383 SBF units released by the government in May was almost equivalent to the total number of resale flats sold in the past three months, she observed.

R'ST Research executive director Ong Kah Seng added that the lowered mortgage servicing ratio (MSR) at 30 per cent of gross monthly salary has shrunk the pool of eligible buyers for executive flats.

Market watchers note that there could be more resale flats in the market when more private condos, executive condos (ECs) and flats under the HDB's Design, Build and Sell Scheme (DBSS) are completed this year.

"It is expected that five DBSS projects and another 2,000 EC units will obtain TOP (temporary occupation permits) this year, and typically second-timers will have to sell their existing HDB flats within six months from key collection," Ms Li said.

"This increased supply together with loan curbs should keep HDB resale prices in check."

Mr Ong noted, however, that not all flats will experience similar price patterns going ahead. "The better located flats, such as those in mature estates such as Bishan, Toa Payoh and Queenstown, are expected to hold firm in pricing," he said.

On the whole, Mr Ong expects demand for resale flats to stabilise or pick up slightly in the second half of the year when buyers find resale flat prices more "reasonable".

Based on SRX data, the HDB rental market improved in May with a one per cent month-on-month increase in rental volumes to 1,564 units. But, overall rental prices edged down 0.3 per cent in the same month, with the weakness most pronounced in executive flats.

Ms Li said she expects the rental market for HDB to remain weak this year given the government's tightening of foreign worker inflows.

There could be more supply in the HDB rental market when more than 19,000 private condos are completed this year and a sizeable number of HDB upgraders decide to rent out their flats, Ms Li said. "This could put a lid on the HDB rentals."

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http://www.straitstimes.com/archive/...r-low-20140606

HDB flat resale prices fall 1.2% to two-year low

Published on Jun 6, 2014 1:28 AM

By Janice Heng And Yeo Sam Jo


THE Housing Board resale market continued to cool last month, with prices hitting a two-year low and fewer flats changing hands.

It was the fourth consecutive month of price decline, according to Singapore Real Estate Exchange (SRX) flash figures yesterday.

Transactions, however, had picked up in March and April.

But that could have been due to pent-up demand from the usually quiet festive season, such that the fall in May was the market coming "back to reality", said R'ST Research director Ong Kah Seng.

The HDB's combined launch of new and balance flats last month could also have diverted demand, said experts.

Resale prices fell 1.2 per cent from April to May, reaching the lowest level since April 2012, according to SRX's price index.

The main reason for the fall remains the same, said analysts: The continued effects of loan curbs introduced last August.

The decline was across all HDB types, with executive flat prices falling most, at 2.8 per cent.

Three- and four-room flat prices dipped 0.8 per cent, while prices of five-room units fell 0.6 per cent.

Overall, prices have fallen 6.5 per cent since their peak in April last year, and 2.7 per cent since the start of this year.

According to SRX's median transaction over X-value measure, the amount that buyers are underpaying for their flats remained stable at $4,000 below SRX's estimated market value.

Yet, buyers continue to hold back. Last month, 1,320 flats changed hands, down 11.1 per cent from the 1,484 deals in April. This was also 19.4 per cent fewer than a year ago.

One reason could be the 3,383 units in the sale of balance flats (SBF) exercise, which are cheaper than resale flats, said OrangeTee head of research Christine Li.

"SBF launches are popular, as they offer flats in a variety of locations and in mature estates with... some which are nearly or already completed," said ERA Realty key executive officer Eugene Lim.

But Century21 chief executive officer Ku Swee Yong cautioned that this is preliminary data which could be later revised.

For Mr H.H. Pang, 56, however, cool buyer sentiment is a worrying reality.

The freelance computer repairman is trying to sell his four-room flat in Ubi so that he can move to Bedok to be closer to his daughter and mother.

"I am worried that I won't be able to dispose of this flat because buyers are waiting for prices to go down," he said.

With the weak resale market, those upgrading to private property - who do not need to sell their flats - may choose to rent them out instead, said Ms Li. This supply increase could keep a lid on rentals, she added.

Rental volume rose, while rents stayed roughly flat last month. There were an estimated 1,564 HDB flats rented, up 1 per cent from April. Rental prices edged down 0.3 per cent.

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