[Singapore] Prices of resale HDB flats continue to rise

by Wayne Chan and Millet Enriquez
04:45 AM Jul 02, 2011


SINGAPORE - After moderating for three quarters, prices of Housing Development Board (HDB) resale flats surged 2.9 per cent between April and last month - almost twice the rate of increase in the first quarter, according to official flash estimates released yesterday.

However, prices of private homes increased at a slower pace in the second quarter - the seventh consecutive quarter in which the rate of increase has fallen.

The Urban Redevelopment Authority's (URA) price index of private homes climbed by 1.9 per cent between April and last month, compared to an increase of 2.2 per cent in the first three months of the year.

Property analysts attributed the spike in resale prices to the Government's recent cooling measures, as demand remains strong.

Said PropNex CEO Mohamed Ismail: "There are still many owners who, due to the cooling measures, are reluctant to move or sell their flat, resulting in a supply crunch and driving median resale prices as well as Cash-Over-Valuation (COV) levels up."

ERA Realty Network's key executive officer Eugene Lim noted that the prices of private property have risen beyond the reach of HDB upgraders, causing this group to postpone their upgrading plans, with some subletting their flats instead.

The HDB said yesterday that it is on track to offer 25,000 Build-to-Order (BTO) flats in the remaining months of the year. It also plans to launch 2,000 flats under a Sale of Balance Flats Exercise in August. Mr Lim said the release of new flats - targeted primarily at first-time buyers - will not have much impact on the resale market.

According to ERA's data, median COV rose from S$30,000 in April to S$37,000 last month - a trend that was also supported by Propnex's data.

In April, the HDB data showed median COV decreasing by S$2,000 to S$21,000 between January and March.

It was different picture in the private homes market: Between April and last month, non-landed private residences in the city fringes increased 1.2 per cent while those in suburban areas increased by 1.6 per cent.

In the first three months of the year, non-landed private residences in the city fringes increased 2 per cent while those in suburban areas increased by 3.1 per cent.

The latest statistics reflect the cautious stance and price sensitivity of buyers in these segments, said Ms Chia Siew Chuin, director of Research and Advisory at Colliers International.

Analysts expect private home prices to grow between 6 and 8 per cent this year - lower than 17.6 per cent last year.

Said Chesterton Suntec International head of research and consultancy Colin Tan: "Market sentiment has taken a hit because of the Euro debt crisis ... but once the debt problem is resolved, then maybe we can see markets returning back again because the fundamentals haven't really changed much."


Via: http://www.todayonline.com/Singapore/EDC110702-0000300/Prices-of-resale-HDB-flats-continue-to-rise