HDB resale market hit record highs in Q3

HDB resale flat prices increased to a record high in Q3, based on the latest data which HDB released on Friday.

The HDB noted a 3.6 percent increase in the Resale Price Index in Q3 over the last quarter to 145.2 points. This increase raised concern among several prospective home buyers, fearing that prices might continue to increase.

The last time the HDB resale market experienced such high volumes in resale transaction was noted in Q4 of 2004, more than four year ago. Compared to 11,649 units that changed hands in Q3 ended September 2009, 2004 had 11,562.

The usual quarterly resale volume of HDB ranges between 6,000 and 8,000, said ERA Real Estate.

“We have seen the HDB resale volume jump to above 10,000 for second quarter and above 11,600 for the third quarter this year,” said ERA Asia Pacific Associate Director Eugene Lim.

“The third quarter is a very good month for HDB resale. It's likely to taper off partly because cash over valuation, due to increased demand, has increased. HDB homebuyers are a price sensitive lot. So it will probably hit a resistance level. And in that sense we will expect resale volume to taper downwards in the last quarter.”

Concerned about the price increases, HDB sellers and home buyers are closely studying the market before coming up with any selling and buying decisions.

“I just need to survey whether I and my girl can save up some money when we get married, whether we can share the burden to buy the house,” stated Freddy Samsi, a prospective buyer.

“I don't think we're really out of the economy, out of the woods yet. And yet housing prices have gone up to a level which I think will not sustain. I'm not sure if the government pegging it to resale is a good idea, because they should keep their own prices,” said John Bosco, a private homeowner.

He added that housing and property are close to the hearts of the people and HDB must keep prices affordable for the public. “Paying S$600,000 for a HDB flat is... obscene actually.”

“I've already bought mine, so I want the price to be stable at the price I bought, and not dip immediately,” said Mr. Teo LT, a homeowner who prefers the rise in prices.

Going forward, as economy recovers, HDB market activity is expected to continue at its current level, said the analysts.