HDB Prices Soar While Demand Falls

The Housing and Development Board (HDB) of Singapore is an institution that is responsible for providing cheap housing to the public.

The last three months of 2008 showed an increasing trend in the prices of resale flats. However, it showed an inching up of 1.4 percent. The other two quarters of 2008 were similar as the third quarter, showing a surge of 4.2 percent in prices, while the second quarter raked in a raise by 4.5 percent.

The prices for reselling of flats with three to four rooms by the Housing and Development Board are supported by a strong foundation of potential buyers, said Mr. Eugene Lim. He is ERA Asia Pacific’s associate director.

The experts agree that the global economic crisis has affected the HDB as well. Sales of flats decreased in the last year as well. The sales from the fourth quarter dropped 21 percent to 15,000 dollars as compared to third quarter sales of 19,000 dollars. Demand for flats also declined with the fourth quarter generating only 24 percent, giving the whole of 2008 a 3 percent decline in flat resale demands as compared to 2007.

The saving grace of the HDB reselling project may lie on sub-lettings, as the number of sub-let rents remained fairly constant during the year.

Sub-letting or subleasing refers to renting a property that a person intends to rent out to others as well.

The numbers do not tell everything however, since even though the total number of sub-lets grew by 20 percent in 2008, the demand for sub-lets on the fourth quarter fell by 7 percent.