The strong recovery of private home prices in 2009 reduced the purchases by HDB upgraders to 33.8 percent in the fourth quarter last year compared to 56.2 percent in the first quarter, according to the latest caveats analysis of Jones Lang LaSalle.
HDB upgraders made up 44.4 percent of private home purchases in Q2 2009, slipping to 37.9 percent in the next quarter.
Ong Choon Fah, Executive Director of DTZ, said: “Whenever the market is down, for instance in Q1 last year, you tend to see more buying activity by HDB upgraders. When prices go up, HDB upgraders pull back, as they are very price sensitive. And there’s no strong push factor for them to buy a private home since they already have a very good-quality roof over their heads.”
The Urban Redevelopment Authority’s (URA) private homes price index declined slightly to 18 percent in H1 2009 but recovered to 24.2 percent in H2.
Chua Yang Liang, JLL’s Research Head for South East Asia, said that the gap between prices of Housing & Development Board (HDB) flats and private condos/apartments have widened since 2008. “As such, we expect HDB upgraders’ ‘participation’ in private home purchases to continue to pull back moderately before picking up again as more mass-market condo projects are launched when the government tenders out more sites during the course of this year.”
“I reckon HDB upgraders’ share of private home purchases could hover around 35-40 per cent by end-2010,” Chua added.