In the first three months of this year, the overall resale prices of HDB flats declined by 0.3% q-o-q, based on the most recent flash estimates. The resale HDB prices fell by 0.2% q-o-q in 4Q2018.
While this is the third consecutive quarter that HDB resale prices have fallen, the latest quarterly decline is considered moderate and is at a slower pace compared to the 0.8% q-o-q decline in the same period a year ago, says Christine Sun, head of research and consultancy at OrangeTee & Tie. “Prices have largely stabilised, slipping by around 2% over the last two years.”
Close to 7,000 flats islandwide will reach their minimum occupancy period (MOP) this year and this will boost the resilience of HDB resale demand this year, says Eugene Lim, key executive officer at ERA Realty Network.
Sun says with more flats in prime locations like Queenstown, Bukit Merah and Ang Mo Kio, as well as Design, Build and Sell Scheme (DBSS) units, reaching MOP this year, marketing activities may pick up for some of these areas.
Citing projects like Skyville@Dawson and Skyterrace@Dawson in Queenstown, Lim says: “We could see more million-dollar flats transacted. With buyers willing to pay top dollar for selected resale flats, [this] is a testament to these flats’ attractiveness.”
Shorter waiting time for HDB BTO flats, relaxation in CPF rules for older flats
The overall buying sentiment in the HBD market is expected to be more positive in the coming months. “As the government will be changing the Central Provident Fund (CPF) loan rules on the purchase of older flats, the new rules may enhance the attractiveness of older flats,” says Sun.
For the whole of 2019, resale HDB prices are expected to increase “very marginally” by up to 1%, says ERA’s Lim.
Recent initiatives by the government, such as the Voluntary Early Redevelopment Scheme and Home Improvement Programme II – both announced at last year’s National Day rally -- should also put residents mind at ease over the future value of their HDB flat. These announcements have not had an immediate impact on resale flat prices, but “over the longer term, as these policies start to be implemented, we should see a change of mindsets towards older resale HDB flats that are affected by depleting leases”, he says.
“Resale flats are still an attractive option to buyers, regardless of whether new or old. Newer flats have a longer remaining lease and hence usually a higher price tag, while older flats may be more spacious and cheaper. Each will appeal to different groups of buyers,” Lim adds.