05/02/2016

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HDB resale prices to be flat in 2016

For the first time in 10 quarters, resale flat prices rose slightly by 0.2 percent in the fourth quarter of 2015, revealed latest data from the HDB.

According to property agency PropNex Realty, this comes after a 0.7 percent and 6.2 percent contraction in 2013 and 2014 respectively. Meanwhile, overall prices fell 1.5 percent last year.

“The potent combination of the measures has been effective at slowing down the price growth of HDB resale prices. Though we expect resale prices to be flat in 2016, it may have already reached a bottoming-out level in Q3 2015,” said Mohamed Ismail, CEO of PropNex.

He believes that the government will maintain measures to stabilise the public housing market such as the Mortgage Servicing Ratio (MSR) cap of 30 percent and the maximum loan term of 25 years for HDB mortgage loans, three-year wait for new PRs before they can buy resale HDB flats, and allowing singles to buy 2-room BTO flats in non-mature estates.

In addition, the Housing Board will launch 18,000 new Build-To-Order (BTO) flats this year, up from the 15,000 units launched in 2015, which will sap demand from the resale market, thereby stabilising prices, noted Ismail.

“HDB prices are going through a period of consolidation with marginal price movements as compared to 2014 when overall resale prices slid 6.2 percent. 2016 may spring a surprise as the current price points will entice more buyers to enter the market as it is attractive enough for young couples and upgraders – which could also be partly attributed to the non-existence of COV (Cash-Over-Valuation) across the board,” he added.

Ismail reckons that 2016 could see prices drop marginally by about one to two percent, with the sales volume exceeding 20,000 units due to the lower asking prices.

Picture Source & Source copied from: http://www.propertyguru.com.sg/property-management-news/2016/1/114220/hdb-resale-prices-to-be-flat-in-2016

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