Resale prices of HDB flats dropped 0.4 percent in Q2 2015 after declining 1.0 percent in the previous quarter – its eighth consecutive quarter of price falls, revealed flash estimates from the housing board.
Mohamed Ismail, CEO of PropNex Realty, attributed the slide to a potent combination of the government’s measures to stabilise the public housing market, like reducing the Mortgage Servicing Ratio (MSR) cap of 30 percent and maximum loan term of 25 years for HDB mortgage loans, allowing singles to buy two-room Build-to-Order (BTO) flats in non-mature estates, and three-year wait for new PRs before they can purchase resale HDB flats.
“The potent combination of the measures has been effective at slowing down the price growth of HDB resale prices. It is also good to note that the 0.4 percent fall in Q2 is the lowest in the last eight quarters,” he said.
With the resale flat market stabilising, the BTO supply will be further reduced to 15,000 this year, stated HDB. To ensure adequate flat supply, this will be supplemented with over 9,000 balance flats which will be released under the Sale of Balance Flats (SBF) exercises.
Given the large stream of home completions from next year — along with the continued enforcement of property curbs, Ismail expects HDB resale prices to soften by four to five percent this year, with volume hitting around 19,000 to 20,000 units due to lower asking prices.
Romesh Navaratnarajah, Singapore Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@propertyguru.com.sg
