HDB resale prices down 6% last year

Prices of resale flats fell by 6 per cent in 2014 – the second straight year of decline – while the number of resale transactions declined 4.3 per cent, according to figures from the Housing and Development Board (HDB).

HDB on Friday (Jan 23) announced that the Resale Price Index (RPI) fell by 1.5 per cent in the last quarter of 2014, from 139.1 in the third quarter to 137 in the fourth quarter. The number of resale transactions rose 2.7 per cent from 4,513 to 4,635 cases in the fourth quarter.

But overall for the year, resale transactions still registered a record low – with just 17,318 cases recorded in 2014. This is the lowest since HDB started releasing such data from the first quarter of 1997.

Subletting transactions rose 16.2 per cent from 8,923 in the third quarter to 10,365 in the fourth quarter. The total number of HDB flats approved for subletting increased by 0.9 per cent, from 47,707 units in September 2014 to 48,120 units in December 2014.

Some property analysts said they expect HDB resale flat prices to continue to soften by another 5 to 8 per cent in 2015. They added this may attract more to buy from the resale market.

Ms Christine Li, head of research and consultancy at OrangeTee, said: “If you look at the prices now compared to say two years ago, two years ago, people were typically paying maybe S$30,000 for a five-room flat in terms of cash over valuation. In today’s market, they do not have to pay cash over valuation.

“I think for 2015, the full-year price decline will be probably between 5 and 8 per cent because the economy is still healthy and we are not seeing a decline in the buying sentiment.

“People are not coming into the market because of the loans but there is genuine demand for HDB flats, because if you look at the resale market, most of the flats are in very good locations. So, if the prices come to a more reasonable level, there will be interest from the buyers and upgraders.”

HDB said it will launch 16,900 Build-To-Order (BTO) flats this year, which will include flats in new areas such as Bidadari and Punggol Northshore.

Source : Channel NewsAsia – 23 Jan 2015

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