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HDB resale prices reach 29-month low in July: SRX

Overall Housing and Development Board (HDB) resale prices dipped 0.9 per cent month-on-month in July, but the number of flats sold went up slightly by 2 per cent from June, according to the Singapore Real Estate Exchange.

SINGAPORE: The resale prices of Housing and Development Board (HDB) flats continued their downward spiral in July, slipping 0.9 per cent from June to mark a 29-month low since Febuary 2012, the Singapore Real Estate Exchange (SRX) said on Thursday (Aug 7).

Prices for 3-, 4-, and 5-room flats declined by 1 per cent, 1.8 per cent and 0.4 per cent, respectively, last month, but executive flats saw a slight 0.1 per cent increase in prices. July’s prices showed a decline of 7.8 per cent from the peak in April 2013, the latest data from SRX revealed.


The number of flats sold, however, improved by 2 per cent on-month in July, with 1,341 HDB flats sold. Compared to a year ago, resale volume slid 10.2 per cent compared with the 1,494 units sold then, it added.

Commenting on the July data, Mr Eugene Lim, Key Executive Officer at ERA Singapore, said HDB resale prices was expected to keep falling in July as the slew of demand and supply measures implemented by the Government continued to impact buyers and sellers.

For instance, resale demand was diluted by HDB’s rolling out of large supply of Build-To-Order flats over the year, thus diverting from the resale market most, if not all, the first-time and single buyers, Mr Lim said.

“Loan curbs like the Mortgage Servicing Ratio (MSR) of 30 per cent and the maximum loan tenure of 25 years continues to be the main factors affecting buyers as they essentially limit the buyers’ loan quantum and therefore the number of potential buyers; particularly for higher priced flats,” he added.

Rental prices and volume followed the same trend, with prices falling 1.5 per cent on-month, while volume went up by 1.7 per cent. In terms of volume, an estimated 1,601 HDB flats were rented, which is an increase over June’s 1,574 units, SRX said.

TOX NEGATIVE, BUT IMPROVING

The overall median Transaction Over X-Value (TOX), which measures whether people are overpaying or underpaying the SRX estimated market value, was still at negative S$3,000 last month. This was up S$1,000 from negative S$4,000 in June 2014. Media TOX has been negative since May 2013, said SRX.


For HDB towns with more than 10 resale transactions in July, 18 out of 26 saw zero or negative TOX in July. The lowest median TOX was Geylang with negative S$9,500, while Clementi had negative S$9,000 and both Choa Chu Kang and Sembawang at negative S$8,000, according to the data.

Eight towns, however, reported a positive TOX. Queenstown had the highest TOX of S$12,000, followed by Bukit Panjang at S$5,000 and Jurong East and Serangoon at S$4,000, SRX stated.

Going forward, Mr Lim said prices could continue to fall a bit further before stabilising as the cooling measures continue to bite. However, a steep fall is not expected, as the economic and employment outlook remains positive. “Our projection is for resale HDB prices to soften by 5 to 8 per cent over the whole of 2014,” he added.