May resale prices for flats dip 1.8% y-o-y: SRX

Fri, Jun 08, 2018


RESALE prices of Housing Board flats rose 0.5 per cent in May from April, according to flash estimates released by real estate portal SRX Property on Thursday.

Prices in May have dipped 1.8 per cent from the same month last year, and are down 13.1 per cent since the peak in April 2013.

There was also a 5.3 per cent drop in the number of resale flats sold last month to 1,753 units from 1,851 units in April. Resale volume was down 52 per cent compared to the peak of 3,649 units sold in May 2010.

Christine Sun, head of research and consultancy at OrangeTee & Tie, noted that HDB resale volume continued its downward trajectory in May, both on a month-on-month and year-on-year basis.

Given that Minister for National Development Lawrence Wong has cautioned home buyers not to assume that all old HDB flats will automatically be eligible for the Selective En bloc Redevelopment Scheme, or Sers, some buyers may be less motivated to purchase resale flats now, especially the older ones, said Ms Sun.

Only 4 per cent of HDB flats have been identified for Sers since its launch in 1995.

"The recent BTO launches have also drawn some potential buyers away from the resale market. As a result, sellers are taking longer to offload their units," said Ms Sun.

On a month-on-month basis, last month's resale prices of HDB four- and five-rooms, and executive flats rose by 0.1 per cent, 0.5 per cent and 1.5 per cent, respectively. Meanwhile, resale prices of three-rooms flats fell 0.1 per cent.

"Displaced enbloc sellers who are now streaming into the resale market seem to be less concerned as many can pay fully in cash," added Ms Sun.

"Many of these buyers are looking for larger resale flats such as five-rooms flats or executive maisonettes in the central areas or near their displaced homes. Thus, owners of these flats could see greater demand in the coming months."

In May, the overall median Transaction Over X-Value (TOX) was zero, up from negative S$1,000 in the previous month. TOX measures whether buyers are overpaying or underpaying compared with SRX Property's computer-generated market value.

Flats in Bishan and Tampines looked to be in demand, with a median TOX of S$12,000 each. Conversely, Geylang and Serangoon posted the lowest median TOX of negative S$22,000 and negative S$8,000, respectively.

Nicholas Mak, executive director of ZACD Group, noted that while this month's flash estimates may not necessarily indicate the start of a market recovery, he expects resale prices to bottom out this year before recovering gradually as "the economy is doing well, and so is the job market".