Singapore

RESALE prices of Housing & Development Board (HDB) flats inched up 0.1 per cent in June from May 2015, according to the latest flash estimates of SRX Property. For some consultants, this reflects increased stability in HDB resale prices and hence a less pressing need for the government to relax its property cooling measures.

SRX estimates showed 0.3 per cent, 0.5 per cent and 0.7 per cent price increases for four-room, five-room and executive resale flats respectively. Resale prices for three-room flats, however, dipped 0.2 per cent.

SRX's flash index for HDB resale prices still represents a 4.4 per cent fall from a year ago and a 10.9 per cent slump from the peak in April 2013.

ERA Realty key executive officer Eugene Lim noted that since March, prices have remained largely unchanged as policies such as the lowering of mortgage servicing ratio to 30 per cent of the borrower's gross monthly income and the ramp-up in Build-To-Order (BTO) flats have curbed the price surge and stabilised public housing prices. "Currently, it seems that prices have found their support level," he said.

According to SRX estimates, HDB resale prices fell 0.4 per cent in mature estates but rose 0.3 per cent in non-mature estates in June. Year on year, prices in mature estates and non-mature estates have fallen 3.5 per cent and 5 per cent respectively.

Some 1,709 HDB resale flats were sold in June, marking an 8.5 per cent increase from May and a 30 per cent year-on-year jump, based on data compiled by SRX.

This means resale volume in June was the highest since May 2013.

SLP International executive director Nicholas Mak noted that the increase in the resale volume and a stabilised price index could be due to a reduction in the supply of BTO flats by the government this year.

With the frequency of the BTO exercise lengthened from once every two months to once every quarter, homebuyers who need HDB flats urgently could be drawn to the resale market; the lowered HDB resale prices have also attracted some buyers, he said.

But Mr Mak noted that if the second quarter of 2015 is really the start of the recovery of the HDB resale market in terms of prices and transaction volume, then it begs the question of whether it is necessary for the government to relax the cooling measures.

"It is our opinion that if the government were to relax any of the existing property market cooling measures, the government's priority would be to adjust the curbs imposed on the public housing market first as the majority of the population and voters live in and own HDB flats," he said.

"If the government were to find that it has become unnecessary to relax the public housing market curbs, then it could be even more unlikely for it to lighten the private housing market cooling measures, which is long awaited by many market participants," Mr Mak reasoned.

R'ST Research director Ong Kah Seng reckoned that HDB flat owners who have difficulty selling their flats have generally not lowered prices excessively and they will still achieve profits upon a resale. "Most flat owners are still sitting on paper gain or enjoying profits upon the resale of their BTO flats," Mr Ong said. "It therefore means there is little pressing need for the removal of the cooling measures."