HDB resale prices up 0.2% in February

The marginal rise was fuelled by three- and four-room flat prices, which rose 0.2 per cent and 0.8 per cent respectively. Five-room flats saw a 0.1 per cent price drop, while prices for executive flats were down 0.7 per cent.
The marginal rise was fuelled by three- and four-room flat prices, which rose 0.2 per cent and 0.8 per cent respectively. Five-room flats saw a 0.1 per cent price drop, while prices for executive flats were down 0.7 per cent.ST PHOTO: JAMIE KOH

Experts say market has stabilised but latest uptick does not signal a rebound

Housing Board resale prices edged up 0.2 per cent last month, maintaining an overall picture of continued stability in the market, according to flash figures yesterday from SRX Property.

For the past 11/2 years, resale prices have fluctuated by less than 1 per cent - and sometimes stayed flat - from month to month.

Experts said last month's marginal change should not be read as a rebound. ERA Realty key executive officer Eugene Lim said: "The signs are becoming clearer that resale HDB prices have largely stabilised over the past two years and might have bottomed out."

But downward price pressures remain strong, he said. "Though we might see month-on-month increases for various flat types from time to time, the possibility of a runaway price increase is very remote."

The 0.2 per cent rise last month was driven by three- and four-room flat prices, which rose by 0.2 per cent and 0.8 per cent respectively.

This more than made up for dips in prices of five-room and executive flats, which were down 0.1 per cent and 0.7 per cent respectively.

STEEP PRICE RISE UNLIKELY

Though we might see month-on-month increases for various flat types from time to time, the possibility of a runaway price increase is very remote. 

MR EUGENE LIM, ERA Realty key executive officer

Overall, the 0.2 per cent rise was felt in both mature and non-mature estates.

But resale transactions fell for the fourth straight month during the traditionally slow festive season, from Christmas until Chinese New Year .

Last month, 1,200 resale flats changed hands, down from 1,286 in January. The figure was slightly higher than the 1,148 transactions posted a year before.

Experts expect transaction volumes to pick up from this month to July, before the Hungry Ghost Festival dampens activity again.

As for prices, the current stability seems set to continue. R'ST Research director Ong Kah Seng predicts prices will stay flat for the full year this year, assuming no change in property cooling measures.

"Most buyers will be 'opportunistic' ones who will buy after a long wait - and not give in to high prices asked by sellers," he said.

ERA's Mr Lim agreed, saying it "would be a mistake" for sellers to think the market is on a rebound and thus increase asking prices.

"This would not work in their favour as most buyers are adopting a very realistic and practical view, and they are not prepared to pay a premium in today's market."

With some 9,000 new flats to be offered in popular mature estates this year, some first-timer demand will also be directed away from the resale market, he noted.

A version of this article appeared in the print edition of The Straits Times on March 04, 2016, with the headline 'HDB resale prices up 0.2% in February'. Print Edition | Subscribe