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SRX Property data differs from HDB flash figures

Analysts say discrepancy could be because SRX's figures do not take in transactions done without property agents' help that are captured by HDB

By Lee Meixian

[email protected]

@LeeMeixianBT

Jul 8, 2016


HDB resale prices fell 0.6 per cent in June 2016, compared with in May, SRX Property's data showed on Thursday.

That amounts to a 0.4 per cent drop in the second quarter, which contradicts HDB's flash estimates that showed resale flat prices inching up 0.1 per cent in the second quarter.

Asked to explain the opposing directions in price movements, ERA Realty key executive officer Eugene Lim said: "We believe the discrepancy could be due to the fact that SRX's figures do not take into account the do-it-yourself (ie without property agents' help) transactions that are captured by HDB.

"SRX's figures only capture the data of transactions done by its consortium of 14 member firms. According to National Development Minister Lawrence Wong, DIY transactions by sellers or buyers accounted for some 24 per cent of resale transactions in 2015."

R'ST Research director Ong Kah Seng added that HDB's flash estimates typically only take into account the first two months of the second quarter, and will not include price movements in June.

"If we compare SRX's resale flat price movements in May versus that in March, we see that resale flat prices increased by 0.15 per cent - not too far from HDB's recent flash estimates. There is therefore no major discrepancy in the data released by SRX and HDB."

According to SRX Property, the resale prices of HDB three-room and five-room flats fell 0.7 per cent and 0.8 per cent respectively, while those of four-room flats remained unchanged and those of executive flats rose 0.1 per cent.

HDB resale prices of mature estates and non-mature estates fell 0.7 per cent and 0.5 per cent respectively in June, compared with May.

In terms of transaction volume, it was flat, with about 1,823 resale flats changing hands, almost the same as the 1,826 transacted units in May. Year on year, resale volume rose 6.7 per cent, from 1,709 units in June 2015.

Mr Lim expects HDB resale prices to fall a minimal 0.5 per cent for the whole of 2016. The stability in prices should support buyer interest in the coming months, he said.

Mr Ong agreed, and added that it had taken about two years after the implementation of the mortgage servicing ratio (MSR) cap in 2013 to reach this price equilibrium point.

"The efforts to achieve this has been quite painstaking, and it is very unlikely that the MSR cap will be lifted soon, in case affordability issues and skyrocketing flat prices recur," he said.

Clarification note: SRX Property has clarified that its figures do include do-it-yourself transactions in HDB. Also, SRX figures are based on monthly changes while HDB flash reports are based on quarterly changes. When the right methodology is used for comparison, both HDB and SRX figures would be similar but not exact, since no conversion from a monthly methodology to that of a quarterly is perfect.