HDB resale prices stabilising; private home values fall further

Public housing prices continued to show signs of stabilising in the fourth quarter of last year, while private home values fell further, according to flash estimates yesterday.

The Housing Board resale price index rose an estimated 0.2 per cent in the three months to Dec 31, the first rise after nine straight quarters of decline.

HDB resale prices were down 1.5 per cent last year compared with a 6 per cent slide from 2013 to 2014.

They are expected to be flat this year but may already have bottomed out in the third quarter of last year, said PropNex Realty chief executive Ismail Gafoor.

Government cooling measures, including the mortgage servicing ratio cap of 30 per cent, and added supply will weigh on demand for resale flats, he said. The HDB will launch about 18,000 flats this year, up from 15,100 last year.

Private home prices were down an estimated 0.5 per cent in the fourth quarter, taking the full-year decline to 3.7 per cent.

This compares with a price decline of 4 per cent in 2014, but that is not an indication that values will decline more slowly this year.

While the drop in the fourth quarter was the smallest across the nine straight quarters of moderation in the Urban Redevelopment Authority's property price index, it followed the largest quarterly drop of 1.3 per cent in the three months to Sept 30.

"The index has been... generally trending sideways and downwards. We shouldn't read too much into (the slight decline)," said JLL national research director Ong Teck Hui.

Strong new-sale prices probably dominated transactions in the quarter, said Mr Desmond Sim, CBRE research head for Singapore and South-east Asia. "New-sale prices tend to be propped up by underlying land prices. Generally, we are not seeing very large discounts across the board," he said.

Launches in the fourth quarter included Principal Garden, The Poiz Residences and Thomson Impressions. These were in the city fringes, where prices of private apartments were unchanged in the quarter.

Private apartment prices in the core central region fell 0.4 per cent in the fourth quarter, while those in suburbs were unchanged.

The suburban condo segment may get some support from stabilising HDB resale prices, as this gives HDB owners more confidence to upgrade, Mr Ong of JLL said.

"It is the first time we are seeing both figures - the HDB resale price index moving up, and (suburban condo prices) flat... If this trend continues, it could lead to stabilisation or perhaps recovery in the private suburban market," said Mr Ong.

Prices of landed properties fell 2.1 per cent in the fourth quarter and were down 4.4 per cent for the whole of last year. The decline over the past nine quarters was 10.4 per cent, versus a drop of 7.6 per cent for non-landed homes.

Several uncertainties this year will suppress prices, including the slowing economy.

"If an interest rate rise gathers pace, more people will be under pressure, especially those highly geared with a few property loans, or who are depending on the rental market to help them service their loans," said ERA Realty key executive officer Eugene Lim.

This article was first published on Jan 5, 2016.
Get a copy of The Straits Times or go to straitstimes.com for more stories.