HDB resale prices increase, private home prices decline in Q1

HDB resale prices rose in the first quarter of 2012, while private homes prices fell for the first time since 2009.

HDB flash estimates showed an increase of 0.6 per cent in the January-March 2012, the smallest rise in resale prices since the third quarter of 2006. The increase was also lower than the 1.7 per cent gain registered in the fourth quarter of 2011.

Separately, an estimate by the Urban Redevelopment Authority (URA) showed a 0.1 per cent drop in the price index for private homes in the first quarter, compared to a 0.2 per cent increase in the fourth quarter of 2011.

Prices of non-landed private residential homes fell by 0.9 per cent in the core central region and 0.7 per cent in rest of central region during the quarter.

However, prices outside the central region increased by 1.2 per cent, compared to a 0.6 per cent rise in the previous quarter.

Commenting on the latest HDB figures, real estate agency ERA said resale prices are stabilising and cash-over-valuation premiums are falling.

ERA’s key executive officer Eugene Lim said HDB resale prices have hit a ceiling and home-buyers are attracted to new BTO flats.

ERA added that the latest move to allocate 15 per cent of BTO flats in non-mature estates to second-time HDB buyers has also drawn home-buyers toward this segment.

Overall resale transaction volume has fallen, with larger flats such as five-room and executive flats seeing a bigger reduction in resale volume compared to three- and four-room flats.

According to its analysis, median COV for all flat types have fallen by between 16.7 per cent to 18.2 per cent.

ERA expects median COV to continue to fall and stabilise at S$15,000 by year’s end.

On private homes’ resale prices, Jones Lang LaSalle’s head of research for Southeast Asia Dr Chua Yang Liang said weaker economic conditions have softened investors’ demand for private homes.

Coupled with recent government measures to cool the property market, sales volume and resale prices for private residential market have been further dampened.

He noted that prices for private homes in the core central region fell 0.9 per cent, the largest initial quarterly decline since 2004.

But there is still a demand for mass market homes, with prices in the outside central region going up by 1.2 per cent, double that the fourth quarter of 2011.

Source : Channel NewsAsia – 1 Apr 2012

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