Signalling growing stability in the public housing market, HDB resale prices were unchanged in the third quarter compared to the second quarter, based on flash estimates from the Housing & Development Board.
This is the second straight quarter that HDB resale prices have stayed flat. The HDB resale price index is still 9.8 per cent below the peak in the second quarter of 2013.
From the demand side, there is still much dry powder in the market, and many have felt that the market has bottomed out, an analyst said.
HDB flat buyers are the group least affected by the cooling measures. Separately, more sellers are willing to sell at current prices, as they hope to take up the opportunity to purchase private homes, which have become more affordable.
Another noted that with the HDB resale price index showing negligible price movements in the past four quarters, it is obvious that prices are in a consolidation phase, with a possibility of bottoming out soon.
Calling this a new norm whereby price fluctuations will not be as large as those from 2007 to 2011, HDB resale prices could be on track to end the year on a positive note.
The index will also see the lowest yearly price fall in three years, after a 1.6 per cent dip in 2015 and a 6 per cent fall in 2014. The current price points will entice more buyers to enter the market as it is attractive enough for young couples and upgraders.
While there are concerns over a potential hike in interest rates, the increase is likely to be small and unlikely to have a major impact on the public housing market.
ERA Realty key executive officer Eugene Lim noted that rationality has set into the public housing market where most sellers are having realistic price expectations.
Since most buyers’ purchase prices tend to be supported by valuation, it is unlikely for future offer prices to deviate too much from recent comparable transactions. “This price stability is expected to be a continued draw for buyers with immediate housing needs to buy resale flats,” he said.
The vast majority of HDB resale flats remain affordable, with headline-grabbing million-dollar transactions still far and few between.
A five-room flat at Pinnacle@Duxton spanning 106 sq m on a high floor was sold last month for S$1.12 million – possibly the highest price ever fetched by a HDB unit. A few million-dollar resale transactions were also spotted in City View @ Boon Keng and 441A Clementi Ave 3 in the third quarter.
Park Central @ Ang Mo Kio, a Design, Build and Sell Scheme (DBSS) development that just met the five-year minimum occupation period in July, saw three five-room units transacted last month for between S$780,000 and S$980,000. Launched for sale in 2008, five-room units at Park Central went for about S$600,000 to S$700,000.
HDB said on Monday that it will offer about 5,090 new flats in Bedok, Bidadari, Kallang/Whampoa and Punggol in a build-to-order (BTO) exercise next month. About 5,000 balance flats will also be offered in a concurrent Sale of Balance Flats exercise.
More detailed public housing data for the third quarter will be released on Oct 28, when HDB will also announce the revised resale price index.
Adapted from: The Business Times, 4 October 2016