PRICES as well as transaction volumes of Housing & Development Board (HDB) resale flats fell last month, according to the latest flash estimates from SRX Property. Its price index for HDB resale flats fell 0.3 per cent last month over March 2017 - reversing the 0.3 per cent month-on-month gain posted in March 2017.
Year on year, the price index also shed 0.3 per cent from April 2016. From the peak in April 2013, the index has slipped 11.4 per cent.
The subindex tracking prices of flats in mature estates has eased 0.2 per cent year on year - compared with a 0.4 per cent fall in non-mature estates over the same period.
Data compiled by SRX Property estimated that the volume of HDB flats resold shrank 4 per cent to 1,834 units last month from 1,910 units in March 2017. Year on year too, the figure was 0.9 per cent lower than the 1,850 units resold in April 2016.
The resale volume was 49.7 per cent lower than the peak of 3,649 units in May 2010.
OrangeTee's head of research and consultancy Wong Xian Yang expects HDB resale prices to fluctuate within a band of minus one per cent to plus one per cent this year - with several factors keeping prices sideways.
"Demand remains healthy due to a growing belief that resale HDB prices have more or less stabilised and are unlikely to show a major correction - barring an unexpected deterioration in economic conditions," he said.
"Moreover, the increase in the CPF Housing Grant announced in this year's Budget for first-timer families buying resale HDB flats should provide more incentive for eligible families to look at the resale market. This should drive slightly more demand towards the resale market and help support prices," said Mr Wong.
That said, the prevailing loan curbs, a healthy pipeline of Build-to-Order flats from the HDB and an uncertain economic climate will continue to hold back a robust recovery in resale HDB prices, he added.
He expects HDB resale volumes to grow around 2 to 5 per cent in 2017.
Savills Singapore research head Alan Cheong highlighted National Development Minister Lawrence Wong's cautionary statement in March against paying high prices for older resale HDB flats with short balance leases - in anticipation of a potential windfall if the block is selected for the government's Selective En-bloc Redevelopment Scheme (Sers). Only a small minority of HDB flats are picked for Sers; for the vast majority of HDB flats, their leases will eventually run out and the flats returned to HDB, which in turn will surrender the land to the state, Mr Wong said.
Giving his take, Mr Cheong of Savills reasoned: "With this statement weighing on the minds of potential buyers, sellers of older HDB flats in sought-after estates may have to temper their expetations. This is likely to result in a further delay in the price recovery for such resale flats.
"However, the flip side of this is that HDB flat owners who can afford to upgrade to private properties may now be more motivated to do so since they now have better clarity about the fate of their current abode as the lease runs out."
Source: SRX (05 May 2017)