Looming HDB flat glut to further drag resale prices in 2014

Resale prices hit a 2-year low in Q3.

Resale prices of HDB flats continued to decline in the third quarter, as HDB’s flash estimates showed a 1.6% decline to 192.5 points.

This figure marks the fifth consecutive quarter of declines and also marks a 2-year low for HDB resale prices.

According to PropNex, a looming flood of new HDB homes is going to drag resale prices further this year, even as buyer sentiment continues to be subdued thanks to the government’s property cooling measures.

“Home buyers are now more restrained if their MSR is over 30 per cent or TDSR is near 60 per cent. In summary, home-buying sentiment is more subdued. Loan curbs and softer prices will ultimately mean that HDB upgraders have less to spend on their next property,” said PropNex CEO Mohamad Ismail.

PropNex 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.