The stabilising trend for HDB resale prices continued in the fourth quarter of 2016.
Prices dipped 0.1 per cent from the third quarter, putting the full-year decline at 0.1 per cent, based on flash estimates from the Housing & Development Board on Tuesday.
The potent combination of cooling measures has been effective in arresting the price growth of HDB resale flats.
The HDB resale market had its biggest correction in 2014 at minus-6 per cent, and this tapered to a smaller correction of minus-1.6 per cent in 2015. HDB prices are going through a period of consolidation with marginal price movements.
ERA Realty key executive officer Eugene Lim noted that with prices stabilising, resale flats appeared to be gaining favour among buyers, with about 19,089 units transacted from January to November 2016. “This number is expected to exceed the full-year 2015 figure of 19,306,” he said.
He believes the higher number is also partly boosted by the raising of the household income ceiling for the Special CPF Housing Grant, and the introduction of the Proximity Housing Grant.
According to National Development Minister Lawrence Wong last month, some 4,100 households benefited from the enhanced Special CPF Housing Grant, and about 6,000 households from the Proximity Housing Grant when they bought a flat in the resale market close to their parents or married children.
As prices of private residential properties continue to decline further, more HDB flat owners could look to upgrade to private addresses.
More four-room and five-room HDB flats could be put up for resale in 2017, as there will be substantial private residential homes and executive condominiums completing.
Four-room and five-room flat owners tend to form the majority of HDB upgraders. So resale prices of four-room and five-room flats may be under more pressure in 2016, compared to other flats.
Going into 2017, Mr Lim said HDB’s slight trimming in its build-to-order (BTO) flat supply may spur an increase in the demand for resale flats.
He expects the full-year price change for 2017 to be within a range of negative-0.5 per cent to 0.5 per cent, while the resale transaction volume could keep between 20,000 and 22,000.
Data for the full quarter and more detailed public housing data will be released on Jan 26, 2017.
HDB also announced that this year, it will launch about 17,000 new flats for sale. For the first BTO exercise in February, it will offer about 4,100 flats in Clementi, Punggol, Tampines and Woodlands.
Adapted from: The Business Times, 4 January 2017