4.4% jump in second quarter, given strong demand, tight supply and higher valuations
THERE is a buzz in the property market and it is in the heartland.
HDB homes are continuing their bull run - even as private home prices stagnate - with prices rising 4.4 per cent in the second quarter.
Housing Board homes continue to draw buyers as prices rose 4.4 per cent in the second quarter. -- ST PHOTO: STEVEN LEE CTThis is according to flash estimates released by the Housing Board yesterday.
The latest jump is higher than the 3.7 per cent first-quarter rise in HDB flat prices.
Housing experts point to an underlying healthy level of demand for resale flats, tight supply and higher valuations as key reasons for the rise.
The onward march of HDB flat prices comes after prices rose 17.4 per cent last year.
In contrast, private home prices inched up only 0.4 per cent this quarter, compared to 3.7 per cent in the previous quarter, flash figures from the Urban Redevelopment Authority showed.
Last year, private home prices soared 31 per cent.
One reason public flats are outperforming private homes now is that HDB price rises are still lagging behind those of private homes which shot up in the housing boom, say market watchers.
Knight Frank director of research and consultancy Nicholas Mak said HDB prices still have room to rise as they were slow to take off at the start of the recent property boom.
Higher valuations of resale flats are also likely to have contributed to the price rises, said PropNex chief executive Mohamed Ismail.
He expects public-housing prices to continue their rise, by another 5 per cent, for the rest of this year. That would mean a full-year jump of about 13 per cent.
Both men agreed that the tight supply of HDB flats is another factor keeping the market buoyant, with demand from upgraders, downgraders and permanent residents.
'With Singapore's economic fundamentals still intact, the buzz in the HDB resale market is expected to continue in 2008,' said ERA Realty's assistant vice-president Eugene Lim.
'A buoyant HDB resale market is good news for developers of mass-market condominium projects as HDB upgraders are their primary target market,' he added.
However, with the stream of new flats coming into the market, some demand will move away from the resale market to new flats, he said.
During the first half of this year, HDB launched 4,524 new flats.
Subject to demand, HDB said in a statement that it plans to offer about 3,900 new flats under the Build-to-Order system over the next six months, in towns such as Punggol, Sengkang and Bukit Panjang.
The full data for the second quarter will be released at the end of the month.
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