HDB resale sees the price up to 0.1% in Q2.
Flash estimates released by the Housing & Development Board (HDB) on Friday showed resale flat prices inching up 0.1 per cent in the second quarter of 2016 - undoing the 0.1 per cent dip in the index in Q1 this year.
The index has shown marginal price movements up and down in the past three quarters. As a result, the index is down just 0.1 per cent from a year ago.
A consultant said that it is obvious that prices are in a consolidation phase. With prices consolidating, he expects transactions to pick up. Resale buyers who have remained on the sidelines should have by now understood that prices will not fall very much more below this level.
The prolonged price expectation mismatch between resellers and buyers since the introduction of the total debt servicing ratio and other measures have reached a stage where stakeholders realise this is the new 'norm'. With prices consolidating, they will be making their moves soon.
ERA Realty key executive officer Eugene Lim agreed that HDB resales prices have stabilised. He expects to see minor price movements each quarter of plus/minus 0.3 per cent.
"HDB resale flats remain attractive to buyers, with some of them willing to fork out higher sums for well located flats. Buying demand is expected to remain resilient, as the price stability serves as a magnet to draw buyers," he said.
To support this claim, he looked at ERA's resale HDB transactions, which represent almost half the islandwide market share. Figures show that the agency sold about 32 per cent more resale flats in Q2 compared to Q1. In all, he expected that about 5,400 to 5,600 flats changed hands in the second quarter.
"Buyers who have immediate housing needs; as well as permanent residents who have met the three-year wait out period are expected to form the bulk of the demand," Mr Lim believed. "Overall, for 2016 we should see a very slight price decline of around 0.5 per cent, much less than the decline of 1.6 per cent for 2015."
Consultants expected property cooling measures to stay in place this year. HDB is also increasing the build-to-order (BTO) supply, launching 18,000 new BTO flats in 2016, versus 15,000 in 2015. The index for the full quarter and more detailed public housing data for the second quarter will be released on July 22.
In its announcement, HDB also said that in August, it will offer about 5,000 BTO flats in Hougang, Sembawang, Tampines and Yishun.
Adapted from: The Business Times, 2 July 2016