TODAY ONLINE : HDB resale flat prices up 3.8 per cent in Q2 this year

HDB resale flat prices up 3.8 per cent in Q2 this year

05:55 AM Jul 02, 2010

by Joanne Chan



SINGAPORE - Prices of Housing and Development Board resale flats continued to climb in the second quarter in the wake of Singapore's economic recovery.

In the latest flash estimates for the second quarter of this year, HDB resale prices rose 3.8 per cent. While the market is showing signs of slowing down, more time is needed before the full impact of Government measures aimed at raising supply could be felt, said analysts.

After stumbling in the middle of last year due to the recession, prices have since registered continuous growth. HDB resale prices rose for a fifth consecutive quarter and housing agents said the increase was due to rising cash-over-valuations (COVs).

PropNex, which handles about 30 per cent of HDB resale transactions, said the median COV has gone up to $30,000 in the second quarter.

The overall median COV was $25,000 in the first quarter, said the HDB.

Another major player in the resale market, ERA, also said the COV had risen by $5,000 in the second quarter.

Media advertising executive Ellena Tan, 25, recently bought a five-room flat in Punggol and had to fork out $30,000 as COV. She said: "It's a very good deal. There are home owners asking for even more ridiculous amounts, such as $50,000 and $65,000!"

ERA's associate director of Asia-Pacific, Mr Eugene Lim, said the Government's move to raise supply will have some impact on the market, but it would take time.

"New flats do not impact people who have immediate housing needs. For example, the upgraders, or those that are PRs, they can only look at the resale market."

Ngee Ann Polytechnic Real Estate Lecturer, Mr Nicholas Mak, said it can take up to a year before prices start to slow down.

Human relations practitioner Kristin Chan, 26, and her fiance want to buy a resale flat near her parents in Bukit Merah, but cannot afford the prices.

" We are looking at BTO flats now as they are more affordable. The flats may be in less-than-ideal locations ... but at least they're cheaper," she said.

On Wednesday, HDB launched about 2,700 Build-To-Order flats in Punggol and Sengkang.

The BTO supply will be supported by units released under the Design, Build and Sell Scheme.

It also put up three sites for tender under the Government Land Sales Programme for the second half of this year.

Analysts expect HDB resale prices to increase by between eight and 15 per cent this year.

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