HDB resale flat prices drop 1.5% in 2017 after 0.2% dip in Q4: Flash data

HDB resale prices edged down 0.2 per cent in the final quarter of last year, making for a full-year price drop of 1.5 per cent, according to flash estimates from the Housing & Development Board (HDB) on Tuesday.

This means the decline in HDB resale prices last year was steeper than the 0.2 per cent dip in 2016.

HDB also said on Tuesday that it will launch its first Build-To Order (BTO) exercise for 2018 in February with an offering of about 3,600 flats in Choa Chu Kang, Geylang, Tampines and Woodlands.

As announced last month, HDB said the total BTO flat supply for 2018 will be about 17,000 units, keeping the supply of flats on a par with last year's.

Commenting on the latest HDB data, PropNex Realty's CEO, Ismail Gafoor said the price decline in 2017 was mostly due to the greater number of HDB owners selling their properties in pursuit of upgrading to private property this year.

He noted that while the figures make for a fifth straight quarter of decline, the 0.2 per cent dip in the fourth quarter was "encouraging" when compared to the 0.7 per cent drop in the previous quarter.

"With the positive sentiment in residential market as well as huge number of en bloc sales in 2017, we reckon a greater demand for HDB resale properties with some en bloc owners considering resale flats. There is a likelihood that HDB prices may well experience a positive growth of one to two per cent in 2018," said Mr Ismail.

ERA Realty key executive officer Eugene Lim, said it expects HDB resales to stabilise, with any price increase in 2018 not likely to exceed one per cent for the full year.

The agency noted a series of developments in 2017 that have likely impacted demand for HDB resale flats such as the increase in housing grants, the shorter waiting time for BTO flats in certain housing estates and the introduction of the Re-offer of Balance (ROF) flats.

There was the impact of comments last year from Minister for National Development Lawrence Wong that not all HDB flats will be chosen for the Selective En bloc Redevelopment Scheme (SERS) and those flats which are not selected will eventually have to be returned to the state.

"The increased awareness of this stark reality has made older resale HDB flats less appealing to home buyers who have longer term considerations, said ERA.

Still, ERA said it expects resale flats to be popular amongst buyers who are not eligible for new flats or have urgent housing needs.

It also expects more resale HDB transactions in 2018 with the introduction of the HDB Resale Portal which can halve the procession time for resale HDB flats from 16 weeks to 8 weeks.

But with the new resale portal, buyers remain price sensitive and would want to ensure that the price they have negotiated and agreed with the seller is at a value that can be confirmed by HDB as the market value, ERA noted.

The final resale price index for the fourth quarter of 2017, together with more detailed public housing data, will be released on Jan 26, HDB said.