Prices of HDB resale flats up a steeper 3.1% in Q2

Prices of HDB resale flats rose a steeper 3.1 per cent in the second quarter compared to the 1.6 per cent increase seen in the first quarter.

The number of transactions rose by about 6 per cent to some 6,600.

The median Cash-Over-Valuation (COV) has also risen.

The COV for a 5-room flat in Bishan was S$50,000. In Toa Payoh it was S$70,000.

Explaining the steeper increase, key executive officer of ERA Realty Network, Mr Eugene Lim, said the number of resale flats put up for sale had fallen when demand continues to be strong.

This is because private property prices, in particular mass market condo prices, have increased beyond the reach of many HDB dwellers who had intended to upgrade.

He said demand is coming from both upgraders and downgraders, as well as PRs and private property owners who have cashed out.

Mr Lim said prices and COVs are expected to continue increasing despite HDB increasing new flat supply unless policy changes are made to correct the situation.

HDB has offered about 15,500 new flats under the Build-To-Order (BTO) system so far, and is on track to deliver 25,000 BTO flats for the whole of 2011.

The remaining 9,500 new flats will be released over two BTO launches before year end.

In addition, HDB said it’s preparing a Sale of Balance Flats Exercise to widen the choices for flat buyers.

Source : Channel NewsAsia – 22 Jul 2011

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