HDB's demand-side and supply-side measures begin to have cooling effect
THE HDB resale market appears to be stabilising, judging by the latest data from the Housing & Development Board.
Figures released yesterday show HDB resale prices gained 2.8 per cent quarter on quarter in Q1 this year - slightly more than an earlier flash estimate that suggested a 2.7 per cent increase. The rise lifted the index to an all-time high, but it was slower than the increases of 3.9 per cent in Q4 2009 and 3.6 per cent in Q3 that year.
The number of HDB resale transactions fell 5 per cent to 8,484 deals in Q1 this year, from 8,926 cases in Q4 2009. And the median cash-over-valuation (COV) sum rose by just $1,000 to $25,000.
All of this suggests a stabilisation in prices, analysts say.
'It shows that HDB's two-pronged approach - implementing demand and supply-side measures - is beginning to have a cooling effect on the sizzling resale market,' said Eugene Lim, associate director of ERA Asia-Pacific.
In early March, the government introduced demand-side measures to hurt speculators. The time that buyers are required to stay in HDB flats before reselling them - minimum occupation period or MOP - was extended to three years, from one or 2.5 years, for all HDB flats bought in the resale market. And the loan-to-value limit on housing loans was also reduced from 90 to 80 per cent.
On the supply side, HDB has been pushing out new flats at a fast clip since the start of the year. About 5,100 new build-to-order (BTO) flats were launched from January to April. HDB plans to launch about 12,300 new BTO flats by September this year and will launch even more projects in Q4 if demand is sustained.
PropNex chief executive Mohamed Ismail said market tolerance is being reached as the government continues to push out new BTO flats.
ERA's Mr Lim said: 'The number of new BTO flats to be launched this year in various locations - supplemented by upcoming DBSS (design, build and sell scheme) and executive condominium projects - is expected to take some steam out of the resale market. It makes more sense for eligible Singapore-citizen households that do not have immediate housing needs to buy these projects instead of resale flats, as more than 90 per cent of resale transactions involve COV.'
Because of this, COV values are expected to stay at current levels. Analysts had previously said high COV values were pushing up the resale price index over the past few quarters.
In Q1 2010, three-room and four-room flat transactions - which accounted for 67 per cent of all resale transactions - fetched median COVs of $22,000 and $25,000 respectively. And five-room and executive flats were transacted at median COVs of $28,000 and $30,000 respectively. Resale flats in Bishan attracted the highest median COV of $32,000, followed by those in Punggol at $31,000.
Source: Business Times, 24 Apr 2010
Post a Comment