Prices Of HDB Resale Flats May Go Up By 10% This Year

Source : Channel NewsAsia, 03 January 2008

Market watchers said HDB resale prices could go up by as much as 10 percent this year and this would bring prices close to their 1996 peak.

They said even though the HDB is releasing more units into the market, demand for resale units is likely to remain strong.

HDB resale prices picked up in the second half of last year, bolstered by a 30 percent jump in private residential prices islandwide.

By the end of last year, HDB resale flats were fetching 17 percent more on average.

Some real estate agents said they expect the uptrend to continue.

Mohamed Ismail, CEO of PropNex Corporation Pte Ltd, said: "The HDB prices went up by over 6 percent in Q4 2007. This momentum will carry forward at least in the next two quarters because when people pay high COV (cash over valuation), it cannot suddenly come to a halt in January and February."

Some market watchers are looking for a 5 to 7 percent price increase this year, although there are others who said 10 percent is possible.

Property consultants said the latest design-and-build flats announced by HDB in Simei, Toa Payoh and Bedok will not make much difference to the level of demand for resale units.

"There's still a shortfall of readily available houses. Even though HDB has come out to ease the situation with the build-to-order and DBSS (Design, Build and Sell Scheme), these houses are not immediately available until the next three years or so. Therefore, the demand for retail will still be strong," said Mr Ismail.

Consultants noted that homebuyers are paying S$20,000 above valuation for good HDB units in the outlying areas, and S$50,000 to S$70,000 for central districts.

Higher valuation plus the increase in transactions last year meant bonus takings for property agents.

PropNex said out of its 7,000 agents, three of them earned over a million dollars last year and about 100 agents earned over S$200,000 each – a record for the firm.

Property agents said they expect sales to remain brisk for the first half of this year due to pent-up demand from the last quarter. - CNA/so