Despite expectations of higher demand in the HDB resale market, prices are not likely to shoot up, say analysts.
HDB resale flats have become more appealing for first-time buyers in light of the higher CPF housing grants announced as part of yesterday’s budget, said Eugene Lim, Key Executive Officer at ERA Realty Network.
“Buyers who are sitting on the fence may very well tilt towards a resale flat with this announcement, as resale transaction time is a fraction of the three-year waiting period for a Build-To-Order (BTO) flat,” he noted.
However, he doesn’t expect HDB resale prices to rise anytime soon, as many HDB flats are largely similar in design and space, among other attributes. If some sellers were to increase their prices rashly, prospective buyers could easily turn to those offering similar flats at lower prices, he said.
Meanwhile, JLL’s National Director for Research and Consultancy, Ong Teck Hui, expects the hike in CPF housing grants to help sustain growth in HDB resale volumes, which rose by 7.8 percent year-on-year in 2016, while resale prices, which have remained largely flat since Q3 2015, are projected to stabilise or rise slightly due to better demand.
On Monday (20 February), Finance Minister Heng Swee Keat announced that CPF housing grants would be raised from $30,000 to $50,000 for first-timers looking to buy 4-room or smaller HDB flats on the resale market. For 5-room or bigger flats, the grants will be increased from $30,000 to $40,000.
Likewise, grants for single first-time buyers will go up from $15,000 to $25,000 for those planning to purchase 4-room or smaller resale flats. For larger units, it will be raised from $15,000 to $20,000.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
