SRX: HDB Sept resale prices down again

RESIDENTIAL MARKET

SRX: HDB Sept resale prices down again

Housing and Development Board (HDB) resale prices could have fallen in September for an eighth consecutive month, going by flash estimates from the Singapore Real Estate Exchange (SRX).

Its data shows HDB resale prices dipped 0.5 per cent last month from August, dragged down by price declines in three-room, four-room and five-room resale flats, which retreated 0.2 per cent, 0.2 per cent and 1.6 per cent respectively.

The price declines were largely within expectations, consultants say, as the dampening factors of a loan curb, purchase restrictions on Singapore permanent residents and an increased supply of new build-to-order (BTO) flats continued to weigh on demand.

“The demand and supply side measures implemented by the government continue to put a lid on any price increase,” said ERA Realty key executive officer Eugene Lim.

“Sellers and buyers are also more realistic now and so any price moderation is very marginal,” he said.

Executive flat prices bucked the trend in September by inching up 0.1 per cent over the month.

This could reflect that prices have already fallen to levels that better match buyers’ affordability. Some buyers on the sidelines saw it as an opportune time to get such flats since prices have fallen over time.

Overall resale volumes, however, improved as some 1,469 HDB resale flats were estimated to be sold in September, a 10.7 per cent increase from the 1,327 in August. This also marked a 19.9 per cent increase from a year ago.

The jump in volume could be attributed to the return of buyers who had earlier stayed away from the housing market during the Hungry Ghost Festival in August.

HDB rents will continue to face headwinds in view of tightened foreign worker policy and falling private property rents (especially in the Outside Central Region).

Last month, the rental market remained soft, with SRX estimates showing some 1,483 HDB flats rented in September, down 6.7 per cent from August and down 0.7 per cent from a year earlier.

Rental prices slipped 0.3 per cent month on month in September as the three-room, five-room and executive flats posted marginal rent declines of 0.5 per cent, 0.3 per cent and 0.8 per cent respectively. Compared to a year ago, overall rents in September were down 2.5 per cent.

More HDB upgraders have decided against selling their flats in view of the weak buying interest and are putting up their flats for subletting. They would hence have to offer their flats at very competitive rentals to attract tenants.

A forward-looking indicator of SRX showed that buyers of resale flats could be paying S$2,000 below SRX’s computer-generated market values.

For the whole of this year, resale HDB prices are expected to fall by 5-8 per cent, according to consultants.

Source: Business Times – 10 October 2014

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