HDB Resale Price Index shatters record with 2.5% hike

Amid ballooning supply of flats.

According to PropNex Realty, the HDB Resale Price Index (RPI) had inched 2.5% Q-on-Q to a new record high of 202.9, ending 2012 with escalating prices despite the increased supply of new flats.

Here are commnets from Mr Mohamed Ismail, CEO of PropNex Realty:

The HDB resale price index is now at its historical peak as this increase of 2.5% is the highest since 3Q11, when the price index grew by 3.8%. One of the reasons for the increase in resale price index is the tight supply of resale flats coupled with the strong demand.

However, a closer look at the figures showed that the overall price increase of 6.4% for 2012 is the lowest for the past 5 years since 2007. Overall, I think HDB’s policy of increasing the housing supply had produced the desired results of moderating public housing prices.

The last two quarters in 2012, however, had set the tone for an expected price increase in the HDB resale market in 2013. We forecast a strong growth in the first half of 2013 even with an increase of 23,000 new BTO flats due to the construction time. The impact of this increased supply will only be felt in the second half of this year, as such it is predicted that HDB resale prices are likely to be increasing between 5 to 7% for the entire 2013.