HDB resale flat prices hit new high in Q3

Prices of HDB resale flats in Singapore rose to record highs in the third quarter, according to data released on Friday.

The latest data from the Housing and Development Board (HDB) showed that the Resale Price Index rose 3.6 per cent in the third quarter over the previous quarter to 145.2 points.

This has raised concern among some potential homebuyers, who fear that prices may continue to rise.

The last time the HDB resale market saw such high transaction volumes was more than four years ago, in the fourth quarter of 2004. Back then, 11,562 changed hands, compared to the 11,649 seen in the third quarter ended September this year.

ERA Real Estate said the typical quarterly HDB resale volume ranges from 6,000 to 8,000 units at most.

Eugene Lim, associate director, ERA Asia Pacific, said: “We have seen the HDB resale volume jump to above 10,000 for second quarter and above 11,600 for the third quarter this year.

“The third quarter is a very good month for HDB resale. It’s likely to taper off partly because cash over valuation, due to increased demand, has increased.

“HDB homebuyers are a price sensitive lot. So it will probably hit a resistance level. And in that sense we will expect resale volume to taper downwards in the last quarter.”

Mr Lim also said that the slowing resale transactions will see 4th quarter prices increase at a slower rate, by about 2 to 3 per cent.

HDB homebuyers and sellers said they are concerned about the increase in prices, and are studying the market closely before making any buying or selling decisions.

“I just need to survey whether I and my girl can save up some money when we get married, whether we can share the burden to buy the house,” said Freddy Samsi, a potential homebuyer.

A private homeowner, John Bosco said: “I don’t think we’re really out of the economy, out of the woods yet. And yet housing prices have gone up to a level which I think will not sustain. I’m not sure if the government pegging it to resale is a good idea, because they should keep their own prices.”

He said that property and housing are close to people’s hearts and HDB should make things affordable for people. “Paying S$600,000 for a HDB flat is… obscene actually,” he added.

However, Mr Teo LT, a homeowner, said that he would prefer prices to be high. “I’ve already bought mine, so I want the price to be stable at the price I bought, and not dip immediately,” he added.

Going forward, analysts said they expect activity in the HDB market to maintain at current levels as the economy recovers.

Meanwhile, private home prices were similarly buoyant – up 15.8 per cent in the third quarter, compared to the second quarter. This is a sharp turnaround from the 4.7-per-cent fall seen in the second quarter, and snaps four straight quarters of decline.

Source : Channel NewsAsia – 24 Oct 2009

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