Why HDB prices' downward trend could be short-lived

HDB resale price to climb 4-5%.

According to PropNex, resale HDB flat prices grew at a slower pace in the first quarter of 2013, as demand adjusted to the slew of property cooling measures introduced in January 2013 and the increased supply of BTO flats.

The HDB Resale Price Index (RPI) grew 1.3% to 205.5, compared to a 2.5% growth from the previous quarter.

However, Mr Mohamed Ismail, CEO of PropNex Realty, said “whilst the increase in price index has moderated in 1Q2013, we remain of the view that prices are unlikely to fall due to strong genuine demand and the lack of supply, strong liquidity and the low interest rate environment. Overall, HDB resale price increase for the entire 2013 will be between 4 to 5 % as demand for resale flats will be reduced due to singles being able to purchase BTO flats directly from HDB, the introduction of MSR and the ramp up supply of BTO flats,” added Mr Ismail.