HDB resale market hits new marks
Be ready to cough up even more hard cash if you are planning to buy a resale HDB flat any time soon, say analysts as the bouyant public residential market – in parallel with the private home sector – set record highs.
Housing board statistics on Friday confirmed what flat-seekers have been complaining about in recent months: The median cash over valuation (COV) – what a buyer has to pay in cash, over and above the bank’s valuation of the property – jumped four times to $12,000 during July to September, from $3,000 in the previous quarter.
Buyers in Yishun and Jurong West had to fork out the most in COV: On average, they paid $16,900. Analysts said this was because the valuation of flats in these two estates was generally lower than for units elsewhere, even though they offer comparable amenities and accessibility.
At the other end of the scale, those who bought resale flats in Pasir Ris paid $7,000 in COV on average.
With the number of new private homes sold hitting a high of 5,578 in Q3, the HDB resale market also set two new marks: First, its resale price index hit a new peak of 145.2. Second, the 11,649 units sold meant that the number of transactions within a quarter is the highest since HDB released such data in 2000.
The number of resale applications grew from 10,184 to 11,649 units in the third quarter, with bigger flats registering a greater increase.
For example, the number applying for three-room flats rose by 5.4 per cent (to 3,015), but applications for five-room and executive flats shot up by 26.1 and 40.5 per cent respectively (hitting 3,422 and 1,058).
The escalating prices of resale flats – and, in particular, the rising COV – have been a source of concern for Singaporeans amid the recession and tentative economic recovery.
The issue was raised in Parliament last month, with National Development Minister Mah Bow Tan reiterating that HDB flats remain affordable to most.
Adding that the COV is not unique to HDB purchases but “part and parcel of any property transaction”, Mr Mah pointed out that a third of HDB resale transactions are at prices at or below valuation.
On Friday, the HDB stressed in its press release that it had supplied, through its Build-To-Order programme, some 13,500 new units. It was “monitoring the demand situation and would adjust its building plan accordingly to ensure an adequate supply of new flats”.
But ERA Asia-Pacific associate director Eugene Lim, for one, believes that the supply of new BTO flats would have “minimal” impact on resale prices. Most buyers of resale flats “either do not qualify for new flats or are not willing to wait about three years for their delivery,” he said.
He estimates the median COV for Q4 could range between $15,000 and $18,000.
Mr Nicholas Mak, a real estate lecturer at Ngee Ann Polytechnic, predicts that the average HDB resale price will grow by 5 to 10 per cent for this entire year. And with the economy and the job market on track for recovery, Mr Mak expects a similar price increase next year.
However, despite improved market sentiment, Mr Lim believes prices would “hold steady” – as they can only go up so much before prospective buyers are put off.
Source : Today – 25 Oct 2009
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