HDB Resale Flats Lose Shine

Source : The Straits Times, April 24, 2009

PRICES of Housing Board (HDB) resale flats fell by 0.8 per cent in the first quarter, more than the 0.6 per cent that was earlier estimated, putting an end to its record run since 2006.

And this comes after an increase of 1.4 per cent in the fourth quarter of last year.

In the wake of the falling prices, resale transactions rose by 4.2 per cent - from 6,186 cases in the previous quarter to about 6,446 cases in the first three months of this year. Compared to the same quarter a year ago, the increase is slightly lower at 1.4 per cent.

The median Cash-Over-Valuation (COV) amount, which has been been declining in all resale transactions since the first quarter of last year, continued to tumble in the first quarter. In tandem with the downward trend, cases transacting above valuation also dropped from 85 per cent of all resale transactions in the fourth quarter to 62 per cent in the latest quarter.

The remaining 38 per cent transacted either at or below valuation, said the HDB on Friday.

In the first quarter, the HDB launched about 1,300 new flats in two Build-To-Order projects in Punggol and Woodlands.

Subject to demand, the board said it plans to launch another 2,400 BTO flats over the next six months, of which about 1,000 are three-room

and smaller flats. The bulk of the new flat supply would be in Punggol to build up the critical mass of the town.

Sublet rents for HDB flats also fell in the first quarter by $100 to $200 for four-room and larger flats, but stayed the same as the previous quarter for the smaller flats.

There were also fewer sSubletting transactions, which fell by 4.3 per cent from 3,685 cases in the 4th quarter to 3,525 cases in the last three months.

But the total number of HDB flats approved for subletting rose to about 22,800 units, compared to about 22,200 units in the earlier quarter.

The latest numbers underline the worsening recession which has hit the HDB market sooner than expected.