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HDB resale flat prices in November up 0.4%

Consultants say SRX Property's estimates confirm the sector is consolidating

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HDB resale prices are up 0.4 per cent month on month in mature estates and 0.3 per cent in non-mature estates in November.

Singapore

PRICES of Housing & Development Board resale flats in November have risen 0.4 per cent from the preceding month, buoyed by four and five-room units.

Compared with a year ago, HDB resale prices have fallen 1.9 per cent; they are down 11.3 per cent from the peak in April 2013, going by estimates from SRX Property.

The resale prices of four and five-room HDB flats increased by 0.5 per cent and 1.4 per cent respectively last month, while the resale prices for three-room and executive flats decreased by 0.7 per cent and 0.2 per cent respectively.

"We do not read this as a rebound in resale HDB flat prices," said ERA Realty key executive officer Eugene Lim, "but rather as a seasonal fluctuation. Buyers remain conservative as they want to ensure that the valuation matches the purchase price that they have agreed with the seller on the option to purchase."

He noted that with the exception of well-located or well-renovated flats that are sold at a premium, most transactions these days are around the valuation price.

PropNex Realty CEO Mohamed Ismail Gafoor agreed that it was premature to conclude that the HDB resale market is out of the woods.

"SRX's report confirmed our initial prediction that HDB resale prices are reaching a consolidation phase - dipping just 1.7 per cent in 2015 so far, compared to 6.2 per cent for the whole of 2014."

SRX Property estimates show that HDB resale prices rose 0.4 per cent month on month in mature estates and 0.3 per cent in non-mature estates in November.

Resale volume, however, dropped significantly. According to SRX Property, 1,467 HDB resale flats changed hands in November, nearly 16 per cent down from 1,745 in October.

The November volume is, however, 8.7 per cent up from a year ago. But compared to the peak of 3,649 units in May 2010, it is 59.8 per cent down.

R'ST Research director Ong Kah Seng observed that the bulk of resale deals in November was already on the negotiating table for a while, with buyers and sellers wanting to conclude the deal before December when there would be even fewer flats available for viewings as many people go on holiday.

ERA's Mr Lim noted that the volume of HDB resale flats in November could have been buffeted by the bumper crop of new HDB flats released for application that month.

HDB released 7,061 build-to-order (BTO) flats and 5,350 sale of balance flats. The BTO flats offered included 2,139 units in the first housing projects in Bidadari Estate. The Urban Redevelopment Authority has said that the planning of the estate "will build on the area's rich heritage, cherished existing green spaces and multiple public transport links to create a garden living environment".

Meanwhile, PropNex's Mr Mohd Ismail expects HDB resale prices to fall about 3 per cent for the whole of 2015 and to remain relatively flat next year, while resale volume this year could mark a 10 per cent increase from 2014 due to lower price-entry levels and zero cash-over-valuation.