HDB resale flat prices moderating

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Prices of resale flats in Singapore are still rising, albeit at a slower pace, due to the cumulative impact of the increased supply of new BTO flats and the higher income ceiling for flat buyers introduced last year.

According to flash estimates released by the HDB, prices of resale flats rose 1.7 percent in Q4 last year, down from 3.8 percent in the previous quarter.

“The increased supply of public housing and the recently raised income ceiling had many home buyers switching to buy the HDB BTOs or ECs. As such, the demand had switched from the HDB resale market to the BTOs, thus, prices may be affected,” said a source from PropNex Realty.

HDB said another 25,000 BTO flats can be expected this year, with 3,890 BTO flats to be offered in Choa Chu Kang, Punggol, Sengkang and Tampines this month.

Meanwhile, Mohamed Ismail, Chief Executive of PropNex Realty, explained that the “availability of new BTO flats saw an ease on the current demand, as home buyers are eventually able to have their first home sooner than expected and the available option of Executive Condominiums for the ‘sandwich’ home buyers with the increase income ceiling, had resulted in the HDB resale market to slow down.”

However, he added that the release of these new flats has “not eradicated the strong demand for resale flats consisting of buyers in the categories of singles, permanent residents, HDB upgraders and downgraders as well as private property downgraders. These buyers are genuinely in search of homes for their own.”

He noted that there will be price stabilisation and possibly even price correction of up to three percent in the HDB resale market.

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