HDB flats in Bukit Merah and Redhill are leading the jump in HDB resale home prices this year, according to real estate agency PropNex. Overall, HDB resale prices are forecast to jump by 15 percent for the whole year, but those in Bukit Merah and Redhill are already seeing gains of more than 19 percent.
Five-room flats in the quiet estate of Redhill, which has an MRT station nearby and is 10 minutes away from the city by car, have seen a 19.3 percent increase in property prices from last year.
Those in Queenstown, Toa Payoh and Marine Parade are following suit, with increases of between 16 and 19 percent.
Mohamed Ismail, CEO of PropNex Corporation Pte Ltd, said: "HDB prices have been lagging behind private property for some time and such appreciation in price will bring much cheer to a lot of people who are holding on to their assets.
"Since its last peak in 1996, when the price index hit 136 points, prices were down for a long period of time, and the recent announcement that prices have gone up by 6.5 percent, bringing the price index to 115 points, shows that the current prices are in fact higher than the last peak recorded in 1999."
Estates further away from the central areas are seeing a more modest jump in prices.
In June, a three-room flat in Yishun sold for an average of S$159,000 or a 4 percent increase from last year, compared to the 13 percent jump for a similar flat in Marine Parade, which was sold for S$240,000.
Analysts said strong prices in HDB housing are a clear sign of economic strength, since foreigners are not allowed to buy them.
And although they expect further upside, they caution against factoring in the increase for eventual profit.
"As long as someone pays the cash above value in a rational way, and today in my opinion, the cash is anything in the range of S$10,000 to S$50,000, such cash for a good location in the long term is attainable," said Mr Mohamed Ismail.
Property consultants said flats that are in a good location and have a great view from a high level will always fetch a premium over the rest, and they are expecting HDB resale prices to rise by as much as 10 percent next year. - CNA/so
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