HDB prices closing in on private condo's

Condominiums in the mass and mid-tier market segments have been leading an upward trend in transacted prices and price positioning. Current all-time high prices for HDB transactions, including a HDB penthouse maisonette in Queenstown, which was almost sold for S$900,000 two weeks ago, seem to be bridging the price gap between private properties and public dwellings.

According to Adam Tan, spokesperson from P & N Holdings Pte Ltd, “Buyers from these two segments are generally more price sensitive, targeting property with prices ranging from S$700-S$850psf in the mass market segment, and S$1,100-$1,300psf in the mid-tier segment.”

Most purchasers are home-stayers and a significant group of them fall into the HDB-upgrader category.

However, recent price indices from HDB and URA are witnessing a widening gap, which could lead to a more investor-oriented market in the second half of the year.

Tay Huey Ying, Director for Research and Advisory, Colliers International advised that based on URA’s latest flash estimate for 1Q 2010, “High-end properties which have lagged behind mass-market properties in the recovery path, with average prices still below the recent peak in 2008 by 6.7%, are likely to lead in price growth in 2010.”

“In contrast, while the price index for mass-market homes have already surpassed their 2008 peak by some 7.7%, this would likely limit the strength of price growth for mass-market homes in 2010, given that mass-market home-buyers are typically upgraders who are price-sensitive.”