THE Housing Board resale market continued its slump, with prices falling for the seventh straight month in August.
Further falls are expected, especially with demand being shackled by property cooling measures, even as new flats continue to enter the market. The slide is nowhere near its end and will continue till the end of next year before things pick up, said analysts.
The resale price index has already dropped 4.8 per cent since the start of the year, but the decline last month was the worst so far this year.
Prices fell 1.1 per cent last month from July. Compared with August last year, resale market prices are down 7.1 per cent, flash figures from the Singapore Real Estate Exchange (SRX) showed.
ERA Realty key executive officer Eugene Lim said that as long as the Government's property cooling measures, such as the 30 per cent cap on the mortgage servicing ratio, are in place, the situation will not change. "Prices will keep sliding," he said.
Analysts said new Build-To- Order (BTO) flats will continue to drive down overall prices in the resale market. "More second-timers are collecting their keys to BTO flats, and they will have no choice but to sell their existing flats, so there will be a surge in supply causing resale prices to go down," said PropNex Realty chief executive Mohamed Ismail Gafoor.
Ramped-up BTO launches in recent years mean a record number of people will collect their keys in the next few years. Mr Lim said: "BTOs are taking away a lot of demand from first-timers and singles for resale flats, which they might still find expensive."
HDB launched 33,568 new flats last year, and is offering about 28,790 units this year. So far this year, 10,247 flats were sold on the resale market, SRX data showed.
SLP International Property Consultants research head Nicholas Mak said the falling prices could draw interested buyers. He noted that the resale volume dipped only slightly from 1,342 in July to 1,327 last month. "Eventually prices will become more attractive and more people will opt for resale flats instead of BTOs."
Hougang resident Aida Ahmad, 40, is confident her four-room flat can still fetch a good price. "I am not worried. My flat is in a mature estate and near the MRT and Hougang Mall. More people will want it," said the housewife.
Rental prices and volume stayed relatively flat, with an estimated 1,550 HDB flats rented last month.
Get a copy of The Straits Times or go to straitstimes.com for more stories.