HDB resale volumes to hit 10-year low in 2014

Prices sink amid looming BTO flat glut.

The Housing and Development Board is set to release 80,000 new build-to-order flats within the next three years, prompting prospective owners to sell off their existing flats.

This imminent supply flood is set to drag resale prices further, even as the market continues to struggle with lacklustre transaction volumes in recent months.

According to PropNex, HDB will also launch a total of 24,300 BTO flats in 2014 just slightly lower than last year's supply of 25,100 units. Minister Khaw has also revealed that 18,000 households in the next 3 years will be moving to a BTO flat, thus they are required to sell off their existing flat within the 6 months.

“The imminent flood in supply of HDB resale homes from owners collecting the keys to their new BTO flats and private properties will add further pressure on resale prices, even though transaction volume may also improve slightly as a result due to the lower asking prices of sellers,” noted PropNex’s report.

Here’s more from PropNex:
“This will be a quiet year for the HDB resale market--– similar to 2013 which had seen the fewest deals in years. However, transactions have increased in Q2 and I expect the resale market to pick up in the second half as lower prices may entice more buyers to possibly upgrade to a larger flat,” commented Mr Ismail.

Mr Ismail expects HDB resale prices to soften 6 to 7 per cent for full-year 2014, with volumes hitting around 17,000 units--likely to be the lowest in the last decade.