With strong demand and limited supply in the HDB resale market, despite the recent announcement of newly released 8,200 BTO flats, the Resale Price Index (RPI) has inched up 3.8% to 187.1, according to HDB’s release of the 3Q11 flash estimates today.
The strong demand for resale flats consists of buyers in the categories of singles, permanent residents, HDB upgraders and downgraders as well as private property downgraders. These buyers are genuinely in search of homes for their own occupation. However, due to the cooling measures in January this year, with the revised Minimum Occupation Period to 5 years and the lower 60% Loan-To-Value ratio, home owners are reluctant to move or sell their flat, resulting in a supply crunch and driving median resale prices up. We expect the momentum to continue and prices to increase by 11% for year 2011,” predicts PropNex CEO Mr Mohamed Ismail.
For the past 5 years, from 3Q06, HDB Resale flat prices saw a whopping increase of 82.35%. In spite of this, we are expecting prices to stabilize with the introduction of more new BTO and SBF flats, having a cooling effect on the resale market as more young couples turn from resale flats with high COVs to a wider choice of new flats with a lower price tag.
In the private property market, URA’s price index 3Q11 flash estimates saw a 1.3% increase Q-on-Q to another record high of 205.7, with the Core Central (CCR), Rest of Central (RCR) and Outside Central (OCR) regions chalking up incremental increases of 0.8%, 1.1% and 2.1% respectively.
The marginal increase 1.3% Q-on-Q, compared to the 2% increase in the previous quarter reflects the cautious market sentiments due to the recent economic outlook. The moderating prices with the main contributor of growth in the Outside Central Regions (OCR), is due to the recent mass market condominium launches in these areas. Mr Ismail projects that the mass market demand will still remain strong as most home buyers purchase or invest with mid to long term perspectives.
Factoring in the worsening economic situation, home buyers and investors may be taking a more cautious approach and signs of lower land bid prices may indicate that prices will be adjusting to the market demands in the private residential market in the coming months. With increased supply anticipated, Mr Ismail expects prices to further soften, resulting in an overall 6% to 7% increase in the private property price index for 2011.
For media enquiries, please contact:
Corporate Communications and Marketing Manager
P & N Holdings Pte Ltd (holding company of PropNex Realty)
480 Lorong 6 Toa Payoh #10-01 HDB Hub East Wing Singapore 310480
DID : (65) 6829 6968 / 98287834 | Main : (65) 6820 8000 | Fax : (65) 6829 6600