HDB resale price index see biggest crash in 12 years in 2014

Resale prices dropped 6.1%.

Resale prices for HDB flats crashed to their lowest level in over a decade in 2014. Data released by the Housing and Development Board showed that HDB resale prices registered a 6.1% full-year decline in 2014, the largest decline seen since 2002.

According to PropNex, HDB resale prices were expected to soften by 6 to 7 per cent for full-year 2014, with volume hitting around 16,500 to 17,000 units — the lowest in the last decade.

The falling resale prices are due to the potent combination of the government’s measures to stabilise the public housing market such as, reducing the Mortgage Servicing Ratio (MSR) cap of 30% and the maximum loan term of 25 years for HDB mortgage loans, three-year wait for new PRs before they can buy resale HDB flats, and allowing singles to buy two-room BTO flats in non-mature estates.

“The outlook for 2015 will continue to be moderated with a possible 5 to 6 per cent full year price drop. This is mainly due to the increased number of 2nd keys to their new BTO flats, and they will have to sell their existing flats within 6 months. This figure is expected to be about 6,000 annually for the next 2 years,” commented Ismail Gafoor, CEO of PropNex Realty.