By Wong Siew Ying | POSTED: 08 Nov 2013 21:01 | CNA


Market watchers said overall HDB resale prices for this year will likely fall from 2012 levels.

This comes after the Singapore Real Estate Exchange (SRX) released flash estimates for October.

Overall HDB resale prices dipped 1.6 per cent, weighed down by a strong supply pipeline and various measures that have curbed buying demand.

These include a restriction on the purchase of HDB resale flats by new permanent residents, a cut in the mortgage servicing ratio, and shortening of the maximum loan tenure.

Analysts added that changes such as allowing singles to buy flats directly from the government also siphoned demand from the resale market.

The 1.6 per cent dip in October came on the back of a slight gain of 0.2 per cent in the previous month, and it represents a 2.8 per cent drop from the price peak in January 2013.

Cash premiums for flats — or cash-over-valuation (COV) — continued to fall and are expected to ease further.

SRX said median COV dropped another S$3,000 to S$12,000 in October, the lowest since July 2009.

The region that saw the highest median COV is Bukit Merah at S$38,000, while Choa Chu Kang and Punggol had the lowest at S$5,000.

Eugene Lim, ERA’s key executive officer, said: “We are unlikely to see COV becoming zero across the board — it won’t happen. Why? Because we are still seeing economic growth, we are in full employment, fundamentals are very sound.

“It is just that the flats that are not in… good locations, they are seeing lower transaction prices and lower COVs, but those that are in good locations, their prices are holding.

“We are unlikely to see a negative COV next year. I think it will probably stabilise at around S$10,000.”

Market watchers said over 100,000 new HDB flats are expected to be completed in the next few years, and this will continue to put a lid on HDB resale price growth.

Mohd Ismail, PropNex’s chief executive officer, said: “This year, it is going to be zero growth or a minus 0.5% to minus 1%. And I look at 2014 and 2015, the direction right now based on demand and supply is a certain negative growth.

“In 2014, we may well experience up to a minus 3%, and it will carry through to 2015, another minus 5%. So in all likelihood, public housing will see a correction to the tune of up to 10 per cent before 2016.”

Some analysts said despite the moderation in resale prices, most HDB flat owners are still enjoying healthy capital appreciation as HDB resale prices have gone up by some 100 per cent in the last six to seven years.

In terms of sales volume, SRX said nearly 1,318 resale flats were sold in October, up 26.5 per cent from the previous month.

But compared to 2012, resale volume in October was down by 20 per cent.

Analysts expect some 18,000 to 19,000 units to be transacted for the whole of 2013 — a record low for the HDB resale market.

SRX said an estimated 1,506 HDB flats were rented out in October 2013, up by 7.7 per cent from September.

Meanwhile, resale prices of non-landed private homes in October remained relatively stable.

Estimates from SRX showed that prices dipped just 0.1 per cent, with mass market homes in the Outer Central Region (OCR) leading the decline with a drop of 1.4 per cent.

Mr Lim said: “For OCR, which is the suburban areas, we are seeing more TOP (temporary occupation permit) projects coming on-stream. So if I am selling my home… (I) may have to be more (flexible as) the price will be lower.

“The days when it (was) a sellers’ market… is over for the suburban region. It is a buyers’ market now; buyers basically have a lot of choice.”

Comparatively, private resale home prices recorded lower declines in the city at 0.5 per cent, while those in the city fringe rose 0.4 per cent in October.

SRX said 486 non-landed homes were resold last month, up 13.5 per cent from September.

Also in October, homes in the suburban areas fetched lower rentals, and SRX said rental there weakened by 1.9 per cent.

Rentals in the city were down 1.3 per cent, while those for private homes in the city fringe area were flat.

Overall, rental prices for non-landed homes declined 1.5 per cent in October from September, to the lowest levels since June 2012.

– CNA/gn