Recent measures to cool the HDB resale market have led to fewer flats being transacted, but they have yet to make a noticeable impact on prices.
According to HDB, resale flat prices rose 4 per cent in the third quarter of this year to hit yet another record.
This is the ninth straight quarter of rising prices. Prices had risen 4.1 per cent in the second quarter compared to the first.
The median cash-over-valuation (COV) was also unchanged at $30,000.
Median COVs for four-room, five-room and executive flats has in fact actually rose, to $32,000, $35,000 and $40,000 in the third quarter from $30,000, $33,000 and $36,300 in the previous quarter respectively.
The released data therefore shows that the new measures introduced to tighten home financing and restrict ownership of public housing are not yet officially translating to lower resale flat prices.
The measures have, however, curbed flat transactions. Resale HDB sales fell by 10 per cent to 8,205 deals in the third quarter from 9,114 in the second quarter, largely due to a 25 per cent dip in deals last month compared to August.
HDB said the full impact of the cooling measures will be captured only in the fourth quarter data as the majority of the deals done in the third quarter were submitted to HDB before the new rules.
Some property analysts had other explanations for the lag in effect. They said that prices are not falling yet as many sellers have simply taken their flats off the market due to souring sentiment, instead of accepting lower prices.
Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, noted that while demand-side measures seem to have had an impact, prices could be sticky downwards as supply is limited.
‘Some owners are holding on to their HDB flats, and the fresh supply of flats coming onto the market at the end of the five-year minimum occupation period is not enough,’ he said.
Still, C&H Properties division director Nelson Tan said prices will not hold for long.
‘The reason is prices now are still supported by higher flat valuations, which are based on the recent housing boom, but this will eventually come down as prices soften,’ he said.
Property agencies such as PropNex and ERA Asia Pacific which have captured more up-to-date transactions said prices are indeed starting to show a dip of 3 to 5 per cent.
PropNex chief executive Mohamed Ismail said that the firm’s data for this month showed median COV levels falling to about $25,000, $30,000 and $35,000 for four-room, five-room and executive flats respectively.
Both PropNex and ERA data show that the median COV has dropped from $30,000 to $25,000.
Mr Ismail expects resale deals to dip a further 20 per cent in the fourth quarter, with COV levels stabilising at $22,000.
Associate director Eugene Lim said that ERA’s resale volume has dipped about 25 to 30 per cent since the measures were introduced and sees resale prices adjusting downwards by 5 to 8 per cent over the next six months.