02-04-2011, 06:25 AM
Apr 2, 2011
HDB resale market heats up in Q1
Transactions rise as upgraders are priced out of private mass market
By Esther Teo, Property Reporter
HOUSING Board flat owners looking to upgrade are baulking at the sky-high prices of mass-market private homes.
Instead, they are staying on their own turf and buying HDB resale flats.
Experts say the number of HDB resale transactions rose markedly last quarter as upgraders were increasingly priced out of the private mass-market segment.
Prices of these homes have touched new highs recently in outlying suburban areas such as Simei, Bedok and Jurong. The Urban Redevelopment Authority's (URA) first-quarter flash figures, released yesterday, showed suburban home prices climbing 3.1 per cent, outpacing the 2.1 per cent rise the previous quarter.
Market-wide, prices were up 2.1 per cent, with city centre prices inching up just 0.9 per cent. City fringe prices rose 2.2 per cent in the first 10 weeks of the year, the period covered by the figures.
Cash-over-valuation (COV) - the cash premium paid by buyers over an HDB flat's valuation - has also stabilised after a series of cooling measures. This may be drawing more buyers in, experts say.
More permanent residents (PRs) are also taking a second look at the HDB resale market rather than heading straight for the pricier private segment, they add.
Property firm PropNex said it sold 5.1 per cent more resale flats last quarter than in the previous quarter. ERA said its resale volume jumped by about 8 per cent. COV for both fell to about $20,000.
Dennis Wee Group said COV for the firm's transactions is now an average of $18,000, and that its resale volume also rose 'significantly' last quarter compared with the previous one.
The median COV paid in the fourth quarter was $23,000, the HDB said earlier. It did not provide an estimated median COV for this quarter.
PropNex chief executive Mohamed Ismail said January's property market cooling measures with tighter financing rules 'may have priced many HDB upgraders out of the mass market, forcing them to upgrade within the HDB market'.
PropNex reported a 39 per cent plunge in its mass-market sales last quarter. The URA data also showed that the number of new suburban private homes sold in January and February fell 27 per cent from the previous two months.
Dennis Wee Group director Chris Koh also noted a similar trend of increasing demand for all sizes of HDB resale flats. Many middle-class upgraders have decided to take a fresh look at the more affordable HDB market, he said.
'Larger five-room flats are also starting to sell... Private home prices have gone up so high that buyers have chosen to buy a large HDB flat instead, with the consolation of having a larger size and the convenience of amenities nearby if it's in a mature estate,' he added.
ERA Realty key executive officer Eugene Lim said that first-time buyers are the ones snapping up new launches, while upgraders are mostly buying resale flats.
'Rents are not cheap and have been increasing... Part of these resale transactions are also coming from tenants turned buyers, some of whom are PRs with a lower budget,' he added.
Potential home buyer Carl Tan, 30, and his wife of two years currently live with his parents in an HDB flat in Tampines. Said the IT manager: 'We would like to buy something in the private market because an HDB flat involves restrictions such as the five-year (minimum occupancy) period. But if we can't get anything reasonable soon, we might consider HDB resale.'
esthert@sph.com.sg
HDB resale market heats up in Q1
Transactions rise as upgraders are priced out of private mass market
By Esther Teo, Property Reporter
HOUSING Board flat owners looking to upgrade are baulking at the sky-high prices of mass-market private homes.
Instead, they are staying on their own turf and buying HDB resale flats.
Experts say the number of HDB resale transactions rose markedly last quarter as upgraders were increasingly priced out of the private mass-market segment.
Prices of these homes have touched new highs recently in outlying suburban areas such as Simei, Bedok and Jurong. The Urban Redevelopment Authority's (URA) first-quarter flash figures, released yesterday, showed suburban home prices climbing 3.1 per cent, outpacing the 2.1 per cent rise the previous quarter.
Market-wide, prices were up 2.1 per cent, with city centre prices inching up just 0.9 per cent. City fringe prices rose 2.2 per cent in the first 10 weeks of the year, the period covered by the figures.
Cash-over-valuation (COV) - the cash premium paid by buyers over an HDB flat's valuation - has also stabilised after a series of cooling measures. This may be drawing more buyers in, experts say.
More permanent residents (PRs) are also taking a second look at the HDB resale market rather than heading straight for the pricier private segment, they add.
Property firm PropNex said it sold 5.1 per cent more resale flats last quarter than in the previous quarter. ERA said its resale volume jumped by about 8 per cent. COV for both fell to about $20,000.
Dennis Wee Group said COV for the firm's transactions is now an average of $18,000, and that its resale volume also rose 'significantly' last quarter compared with the previous one.
The median COV paid in the fourth quarter was $23,000, the HDB said earlier. It did not provide an estimated median COV for this quarter.
PropNex chief executive Mohamed Ismail said January's property market cooling measures with tighter financing rules 'may have priced many HDB upgraders out of the mass market, forcing them to upgrade within the HDB market'.
PropNex reported a 39 per cent plunge in its mass-market sales last quarter. The URA data also showed that the number of new suburban private homes sold in January and February fell 27 per cent from the previous two months.
Dennis Wee Group director Chris Koh also noted a similar trend of increasing demand for all sizes of HDB resale flats. Many middle-class upgraders have decided to take a fresh look at the more affordable HDB market, he said.
'Larger five-room flats are also starting to sell... Private home prices have gone up so high that buyers have chosen to buy a large HDB flat instead, with the consolation of having a larger size and the convenience of amenities nearby if it's in a mature estate,' he added.
ERA Realty key executive officer Eugene Lim said that first-time buyers are the ones snapping up new launches, while upgraders are mostly buying resale flats.
'Rents are not cheap and have been increasing... Part of these resale transactions are also coming from tenants turned buyers, some of whom are PRs with a lower budget,' he added.
Potential home buyer Carl Tan, 30, and his wife of two years currently live with his parents in an HDB flat in Tampines. Said the IT manager: 'We would like to buy something in the private market because an HDB flat involves restrictions such as the five-year (minimum occupancy) period. But if we can't get anything reasonable soon, we might consider HDB resale.'
esthert@sph.com.sg