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Latest Property Real Estate News - Published on 27/01/2012
The HDB market is well on track for a steadier and more gradual growth in 2012, with 4Q11’s Resale Price Index’s (RPI) marginal increase of 1.7% up to 190.4 reflecting the cumulative impact of the increased supply of new BTO flats and the recent increased income ceiling for HDB home buyers implemented in August 2011. However, with the introduction of 28,000 BTO flats and the increased income ceiling announced in 2011, the HDB resale market is expected to slow down for the rest of 2012.
“Despite the fact that the RPI has reached a new record high, we can see from HDB’s 4Q11 data that the cooling measures have certainly impacted the market. The sales volume had slightly increased by 0.3% Q-on-Q to 5,921 resale units sold in 4Q11, bringing the total number of units sold in 2011 to 24,633, and an all-time low in the last decade, 24.0% lower than 2010’s sales volume. The dip in sales volume is due to the minimum occupation period and restrictions on private property owners having to dispose their property within 6 months as well as the Loan-To-Value (LTV) cap to 60% for additional mortgages. These have attributed to many HDB homeowners taking a more cautious approach in selling their flats. Overall, COVs are likely to remain with marginal softening and we can expect a further dip of $10,000 - $15,000 from its current median COV for the various estates.” remarked Mr Mohamed Ismail, CEO of PropNex Realty.
Median COV 3-rm Median COV 4-rm Median COV 5-rm Median COV Executive
3Q 2011 $30,500 $38,000 $40,000 $55,000
4Q 2011 $28,000 $33,000 $35,000 $50,000
Jan 2012 $22,000 $30,000 $30,000 $47,500
Source: Streetsine and PropNex,
According to PropNex data, the media COV for 3-room flats now stands at about $22,000. This is good news for potential homebuyers of smaller HDB resale flats, especially the lower-income families and younger couples.
The overall median resale prices are still inching marginally upwards, according to Streetsine compilation of 3Q11 results, the median resale prices of $325,000, $418,000, $495,000 and $580,000; compared 4Q11 median resale prices of $331,000, $425,000, $503,000 and $585,500 respectively of the various towns, truly reflecting the moderating of prices as in the RPI.
“From the overall analysis of the demand and supply of HDB resale homes, in the short-term, it is unlikely that prices will change drastically. We are expecting another 25,000 flats to be released in 2012 and this will reduce the demand for resale flats. Price stabilisation will set in and possibly even a price correction of not more than 3% in the HDB resale market,” remarked Mohamed Ismail, CEO of PropNex Realty.
This more gradual growth for the RPI looks set to continue in the next quarter but eventually the HDB resale market should stabilize in the mid-term.
END
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