HDB resale prices down 0.3% in Q1

Activity may pick up in market as govt makes changes to CPF loan rules and more flats in prime locations hit MOP

Tue, Apr 02, 2019


HOUSING and Development Board (HDB) resale flat prices dipped 0.3 per cent in the first quarter of 2019 compared with the quarter before, according to the latest flash estimates released on Monday.

The resale price index was 131, down from the 131.4 in the fourth quarter of 2018. The final figures, with more detailed public housing data, will be released on April 26.

Although prices have continued to fall for a third consecutive quarter, the quarter-on-quarter change is still considered moderate and the decline is at a slower pace when compared to a year ago at 0.8 per cent, noted OrangeTee & Tie research head Christine Sun.

She said that prices have largely stabilised, slipping by around 2 per cent over the last two years.

There may be more positive sentiment for the HDB resale market in the coming months, she added, as the government makes changes to the Central Provident Fund loan rules on the purchase of older flats.

Ms Sun said that the new rules may enhance the attractiveness of older flats as buyers may now be better able to finance their purchases.

With more flats in prime locations like Queenstown, Bukit Merah and Ang Mo Kio and DBSS (Design, Build and Sell Scheme) units reaching their minimum occupation period (MOP) this year, she added that marketing activities may pick up for some of these areas.

In addition, with the latest US Federal Reserve suspending its plans to continue raising rates this year, many central banks around the world may follow suit.

This will ensure ample liquidity within the financial system which usually will have a positive impact on the property market, she said.

In May, HDB is also expected to offer about 3,400 Build-To-Order flats in Kallang/Whampoa, Tengah and Woodlands. There will also be a concurrent Sale of Balance Flats exercise.

Ismail Gafoor, the chief executive officer of PropNex Realty, noted that the HDB resale market displayed signs of resiliency as compared to the same time period last year, with prices holding at current levels.

This is primarily due to the overall demand of 23,099 resale transactions last year, reflecting rising growth for public housing, he said.

"We will witness a continuous stream of supply potentially entering the market, as a result of an estimated 30,000 HDB flats (comprising HDB and DBSS flats) reaching the MOP this year," he said.

"Therefore, with the maturity of MOP flats adding on to the supply, we are anticipating prices of public housing to hold at a marginal increase of one per cent for the entire year of 2019."