Resale flat transactions hit 10-year low

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Less people sold their HDB flats in 2011 than at any other time in the past decade, according to the Housing and Development Board (HDB).

Analysts said factors like an uncertain economic outlook and tighter HDB ownership rules could be discouraging flat owners from selling their properties.

Also, the new supply of HDB units could be reducing the demand for resale flats. Only 24,600 flats changed hands in the previous year, down 24 percent from 2010. This was the lowest in the past decade, with an average of 30,000 flats sold per year.

Aside from the factors given by analysts, rising resale flat prices and the series of cooling measures implemented by the government have also affected resale transactions, noted the HDB.

Demand for resale flats has eased since the HDB began increasing the supply of BTO units, said Eugene Lim, Key Executive Officer at ERA Realty.

He revealed that it may decrease further if the housing authority changes the balloting rules to help second-time buyers own new HDB units.

“When that happens, demand for resale flats will come only from families that have immediate housing needs,” said Lim. These could include singles and permanent residents (PRs) who do not qualify to buy new flats and people downgrading from private properties.

Resale flat prices have continued to climb, despite fewer properties changing hands. However, data from the HDB suggests that the climb is slowing and analysts predict that prices could actually fall for the first time since 2009 this year.

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