HDB resale prices surge 3.8% to hit record high

Resale prices of Housing and Development Board (HDB) flats surged 3.8 percent in Q4 2009, hitting the highest level since 1990.

The Resale Price Index for HDB flats stood at 150.7 in the last quarter of 2009. However, some believed that escalating prices will not dissuade prospective buyers.

According to one property consultant, despite the record high prices, most of the larger HDB units’ prices have not increased dramatically.

"If you look at the overall pricing for the four- and five-room flats, they are all still within the norm, and very much far apart from the kind of headline transaction news that you get of about S$700,000, S$800,000 in that sense," said Donald Han, the managing director of Cushman & Wakefield.

According to some others, there is a strong possibility that prices of resale flats will increase further. This is due to the demand from permanent residents and newly formed families.

“Going forward the case of price growth is not going to be 3 to 4 per cent every quarter. Otherwise, we could see very high unsustainable levels for the HDB resale market,” said Nicholas Mak, Ngee Ann Polytechnic’s real estate lecturer.

"It is more likely going to grow at a pace of between, perhaps eight to maybe as high as 15 per cent for the whole of 2010."

HDB has promised to continue launching more Build-to-Order (BTO) projects this year, if demand for new flats is sustained. It also agreed to continue ensuring an adequate supply of flats to meet the current housing needs.

For a start, 1,300 BTO flats in Hougang and Choa Chu Kang will be offered for sale on Tuesday. However, it will take up to four years before flats under the BTO projects will be ready.

For those who can no longer wait that long, resale flats are an option, thereby, spurring demand and prices.

The detailed public housing data and resale price data for the fourth quarter will be released by HDB on January 22.