HDB resale prices dipped 0.2% in Q2

Older flats of more than 30 years old find it difficult to attract buyers.

The Housing Development Board’s (HDB) resale price index (RPI) has hit 130.8 in Q2, representing a 0.2% fall from the 131 RPI in Q1.

“Prices have been fluctuating within a very narrow -1 and 1% QoQ price change over the last 18 quarters, indicating that resale prices have stabilised,” said Christine Sun, head of research & consultancy at OrangeTee & Tie. “HDB resale prices have moderated as competition for buyers may have intensified with more HDB flats being placed in the resale market in recent months.”

Meanwhile, Sze Teck Lee, head of research at Huttons Asia, cited that another factor behind the RPI’s decline is that there are older flats have more stock than that of younger flats’ stock.

“A two tier market is taking root in the HDB resale market. Other flats of more than 30 years are finding it difficult to attract buyers and achieving prices higher than earlier transactions because of the age. Younger flats of less than 10 years on the other hand are commanding higher prices,” Lee explained.

Sun is optimistic that prices may continue to stabilise in effect of the government’s policy changes that will allow buyers to use more Central Provident Fund (CPF) monies to buy HDB flats.

HDB announced that it will offer about 3,300 Build-To-Order (BTO) flats in Punggol and Tampines in August and about 4,500 BTO flats in Ang Mo Kio, Tampines and Tengah in November. Concurrent Re-Offer of Balance Flats (ROF) and Sales of Balance Flats exercises are slated in August and November respectively as well.

Meanwhile, unselected ROF flats are available for open booking throughout the year.

“We anticipate that HDB resale transactions will continue to rise this year and prices may face further downward pressure from the increasing flat supply in the coming months. Competition for buyers may also intensify with the upcoming BTO exercise,” Sun concluded.