HDB resale volume stays flat

June's 0.6% price dip after May's 0.2% rise not a cause for concern, say housing experts

The Housing Board resale market continued its long stagnation last month, with prices falling 0.6 per cent and virtually no change to the number of flats changing hands, according to SRX Property flash figures yesterday.

June's dip was in contrast to a marginal 0.2 per cent rise in May, but housing experts said that the overall picture remains one of stability.

ERA Realty key executive officer Eugene Lim said: "Monthly price movements are to be expected, and this is not a cause for concern. Nor is it a sign that the price decrease will accelerate."

He expects a "very minimal" full-year price fall of 0.5 per cent.

R'ST Research director Ong Kah Seng said June's dip can be seen as "more of a mini correction following the slight price increase in May".

He expects prices to be flat for the year, assuming that long-term cooling measures are not relaxed.

The overall price fall last month was led by prices falling 0.7 per cent for three-room flats and 0.8 per cent for five-room flats. This more than made up for the unchanged prices of four-room flats and a 0.1 per cent rise in executive flat prices.

The fall was for flats across both mature and non-mature estates, with prices falling 0.7 per cent and 0.5 per cent respectively.

Mr Lim observed that SRX's monthly figures differ from the official HDB quarterly figures.

SRX's figures show that resale prices have fallen 0.4 per cent in the second quarter, in contrast to HDB flash estimates, which showed a marginal 0.1 per cent rise.

This could be because the SRX figures do not take into account do-it- yourself transactions but the HDB figures do, said Mr Lim. Such transactions accounted for almost a quarter of deals last year, he noted.

The resale volume also stayed flat, with 1,823 units sold last month, almost the same as the 1,826 units sold in May.

The market is traditionally quiet during the June school holidays, and this is another reason not to be alarmed by the price fall, said Mr Ong.

"We usually shouldn't read too much into the price statistics in periods like June, December and February, where school holidays or festive periods result in slowdowns in market activity."

In any case, resale deals were still up from a year ago - there were 1,709 units resold in June last year.

This could be due to stable prices, said Mr Lim.

"Prices have been falling for more than two years and buyers who have urgent housing needs would be more confident to look to the resale market," he noted.

StreetSine Technology Group replies:

While we respect Mr Eugene Lim of ERA's expert analysis on property markets, he made two technical and factual errors in his assessment of SRX Property’s HDB data. We would like to correct the record.

First, contrary to Mr Lim’s statement, SRX Property figures are based on the most real-time and comprehensive property transaction data available and do include do-it-yourself transactions in HDB.

Second, SRX figures are based on monthly changes while HDB flash reports are based on quarterly changes. Mr Lim employed the wrong methodology to approximate the quarterly change from SRX’s monthly figures. This gave rise to the erroneous 0.4% quarterly drop that was reported.

When one employs the right methodology for comparison, both HDB and SRX figures would be similar but not exact, since no conversion from a monthly methodology to that of a quarterly is perfect.

Moreover, HDB flash figures may not take into account all of June’s transactions while SRX’s figures do. Therefore, it would be more appropriate to convert SRX Property’s monthly figures to quarterly and compare to that of HDB after the latter releases its full report in a few weeks’ time. By following a monthly reporting, SRX figures are more real-time than that of HDB’s quarterly flash report.

For more details on this correction or additional information on our SRX Property indices, visit http://srx.com.sg/price-index.

A version of this article appeared in the print edition of The Straits Times on July 08, 2016, with the headline 'HDB resale volume stays flat'. Print Edition | Subscribe