Flash estimates of the HDB Resale Price Index (RPI) for the third quarter of 2015 shows a 0.3 percent drop in the prices of Housing Board flats from the previous quarter.
The Index currently stands at 134.6, down from 135.0 in Q2. This is the eighth consecutive quarter of price decline.
The RPI is an indicator of general price movements within the resale public housing market.
PropNex Realty chief executive officer Mohamed Ismail said the decline in resale prices is due to the combination of property cooling measures to stabilise the market.
These include reducing the Mortgage Servicing Ratio (MSR) cap of 30 percent and the maximum loan term of 25 years for HDB mortgage loans, three-year wait for new PRs before they can buy resale HDB flats, and allowing singles to buy new 2-room flats in non-mature estates.
He added that the increased supply of Build-To-Order (BTO) flats has helped push down resale flat prices. “Over 90,000 BTO flats were launched between 2011 and 2014. And in 2015, HDB will launch about 20,000 new flats for sale – such huge supply would have further taken away demand from the resale market, thereby stabilising prices.
“In addition, the Sale of Balance Flats (SBF) programme has also offered a good number and variety of choices for first- and second-time buyers.
“We continue to expect resale prices to fall for the next quarter of the year, but prices may have reached a bottoming-out level as this is the lowest decline in more than two years.”
In November, some 7,000 BTO flats in Bidadari, Bukit Batok, Choa Chu Kang, Hougang, Punggol Northshore, and Sengkang will be launched for sale. HDB will also offer around 5,000 balance flats in a concurrent SBF exercise.
With the large influx of home completions starting from next year, along with the continued enforcement of government measures, Ismail expects HDB resale prices to soften about 3.0 percent this year, with sales volume hitting around 19,000 to 20,000 units due to the lower asking prices.
HDB noted that the RPI and more detailed public housing data for the quarter will be released on 23 October.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, wrote this story. To contact him about this or other stories email romesh@propertyguru.com.sg
