HDB resale prices up a slower 3.7% in Q1

Prices of HDB resale flats rose by 3.7 percent in the first three months of this year over the previous quarter.

The rise in the Resale Price Index (RPI) was lower than the 5.7 percent increase in the fourth quarter of last year.

Resale transactions fell by about 6 percent, from 6,750 cases in Q4 2007 to about 6,360 in Q1 2008.

The median Cash-Over-Valuation (COV) amount among all resale transactions in Q1 2008 was $21,000. This was a slight decrease compared with the COV of $22,000 in Q4 2007.

Going forward, analysts said the diminishing pool of en-bloc downgraders and uncertainties in the global economy will also come into play.

Donald Han, Managing Director, Cushman and Wakefield, said: “The longer you take to offer the property, your asking price and expected cash top up will reduce in accordance to the market demand. We might see a slight down take in terms of the COV, moving slightly down to even S$15,000, that might happen over next one to two quarters.”

14 per cent of resale transactions were conducted at or below valuation during the first quarter of this year. Still, market players are confident of a double-digit growth in resale flat prices in 2008.

But this will not be anywhere near the record of 17 per cent achieved in 2007.

On the supply of new flats, HDB said it plans to offer 6,100 Build-To-Order (BTO) flats for the first nine months of this year.

In the first quarter of this year, HDB launched about 1,100 new flats in two BTO projects in Punggol and Yishun. – CNA/ir/vm

Source : Channel NewsAsia – 25 Apr 2008

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