Analysts expect HDB resale market to stabilise

Prices of completed private apartments fell about 1.9 per cent over the last six months.
PHOTO: ST File photo

Resale prices and volume for Housing Board flats may have gone down last month, but a market stabilisation is still in sight, said analysts.

According to latest SRX Property data, overall resale prices dipped by 0.5 per cent last month, and down 4.3 per cent from a year ago.

This was led mainly by the prices of five-room flats, which fell by 1.2 per cent. Prices of three-room flats stayed flat, while those of four- room and executive flats went down by 0.7 per cent and 0.9 per cent respectively. This comes after three months of relatively flat prices, putting a dent in expectations of a possible bottoming out.

The resale market also saw a 9.2 per cent drop in transaction volume. Some 1,552 flats exchanged hands last month, down from the 1,709 units in June.

Property experts, however, said this dip is most likely a month- to-month fluctuation.

R'ST Research director Ong Kah Seng believes it might be seasonal.

"The second quarter of the year is seasonally more active. It's after Chinese New Year and buyer sentiments tend to be better," he said.

"So the dip in July is expected."

ERA Realty's key executive officer Eugene Lim described the price decrease as "not very significant".

"Resale HDB prices are largely within expectations and transacted prices continue to point to a stabilising market," he said.

Mr Nicholas Mak, research head for SLP International Property Consultants, said: "The price dip is too small and it's just one month.

It's not something to be concerned about." He pointed out that resale volume, while lower last month, is still higher than it was a year ago and on a par with May's count.

This means a market stabilisation is still on the cards."It doesn't mean that it's a U-turn. It's just a bump in the road," he said.

Experts expect both resale prices and volume to stay resilient for the rest of the year. "I don't think prices will dip further. Maybe only marginally, by less than 1 per cent month on month," said Mr Ong.

But a recovery will still take some time, said analysts, pointing to the ongoing cooling measures to stem resale demand.

Mr Mak also pointed to the expected hike in income ceiling for new flats, which would draw buyers away from the resale market and "delay the price recovery".

But Mr Ong said: "Sellers shouldn't worry. They are unlikely to make losses as prices are still fairly high compared with 2009."

But customer service officer Joey Chang, 29, bought her three-room Clementi flat for over $390,000 in 2012, when prices were higher.

"We still have to spend money renovating our new flat," said Ms Chang, who will be moving into a new four-room Punggol unit with her husband and daughter. "I'm worried I might not even break even now."

This article was first published on August 7, 2015. Get a copy of The Straits Times or go to for more stories.