HDB resale prices drop 0.8% in Q1 after 0.2% decline in previous quarter: Flash estimates

Prices of resale government flats have dropped for six consecutive quarters, according to flash estimates from the Housing and Development Board (HDB) on Monday.

HDB resale prices dropped 0.8 per cent in the first quarter of this year from the previous three months, an acceleration from the price decline of 0.2 per cent seen in the final quarter of 2017.

Last year, they fell 1.5 per cent due to a combination of factors, including the increase in housing grants, the shorter waiting time for Build-To-Order (BTO) flats in certain housing estates and the introduction of the Re-offer of Balance flats.

Remarks from National Development Minister Lawrence Wong indicating that not all HDB flats will be chosen for the Selective En bloc Redevelopment Scheme and that flats that reach the end of their lease will be returned to the state also likely depressed prices of older resale flats.

Some analysts had expected HDB resale prices to stabilise this year given the relatively small 0.2 per cent price decline in the last quarter of 2017.

ERA Realty Network's key executive officer Eugene Lim said the current situation is "not worrying".

"Although HDB resale prices have declined for six consecutive quarters, the decreases are rather marginal, 2.3 per cent over the period," he said, comparing it to 2014, when prices fell more than 1 per cent a quarter.

"The government has introduced several new measures designed to make HDB resale flats more attractive in the past year, and now that prices are dipping, more buyers would be willing to consider resale flats," he added.

Mr Lim cited as measures the raising of the maximum amount of grants available to buyers to S$120,000 and the new resale portal halving transaction processing time.

He predicts that prices will remain flat this year, not moving more than 1.5 per cent either way.

The decline in HDB resale prices last year came with a pick up in sales, with transactions up 6.1 per cent to 22,077 compared to 2016.

HDB also announced on Monday it will offer about 3,900 (BTO) flats in Sengkang, Tampines, Toa Payoh and Yishun in the May 2018 BTO exercise. They are part of some 17,000 BTO flats for sale this year, comparable to the 17,584 new flats launched in 2017.

There will also be a concurrent Sale of Balance Flats exercise in May, said HDB.

More information on the BTO flats is available on the HDB InfoWEB.

HDB's final price index for the first quarter, together with more detailed public housing data, will be released on April 27.