Slower price decline for younger and older HDB resale flats in Q3

While demand for HDB resale flats remained strong in the third quarter buoyed by recent policies, the prices of younger and older flats declined quarter on quarter in Q3 2019.
While demand for HDB resale flats remained strong in the third quarter buoyed by recent policies, the prices of younger and older flats declined quarter on quarter in Q3 2019.ST PHOTO: KUA CHEE SIONG

Prices for certain HDB flats fell at a slower pace in the third quarter compared with the same period last year, a new report said yesterday.

It noted that demand for HDB resale flats remained strong, thanks to recent policies.

But prices of younger flats - under 10 years old - and older ones, which are defined as being at least 40 years old, fell quarter on quarter. That said, the rate of depreciation had slowed significantly compared with a year ago, OrangeTee & Tie noted.

Prices for older flats fell 0.9 per cent from the second to the third quarter, as opposed to a 3.4 per cent dip in the preceding year.

"The slower price depreciation seemed to indicate that sentiment towards older flats might have improved in recent months," the report said.

Similarly, prices of younger flats tumbled by 2.5 per cent quarter on quarter, compared with a 4.8 per cent decline a year earlier.

This price weakness was mainly due to more flats being sold within 10 years of completion in recent years, OrangeTee said.

It added that there were also more flats sold in non-mature estates, which may have brought down the overall average price of younger flats in recent years.

There were 1,247 flats sold in the quarter, up 12.4 per cent on the 1,109 moved last year. This was the highest number of new resale flats transacted in a single quarter since the third quarter of 2010.

"The data may indicate that more families could be 'cashing out' on their flats earlier to upgrade to private property or a bigger HDB flat," OrangeTee said.

"Some owners may have sold their flats early for fear that the value would fall with age.

"With more flats reaching their five-year minimum occupation period, we may expect the number of younger flat transactions to rise further in the coming months.

"As competition for potential buyers may intensify with the rising supply of flats, there could be some downward pressure on the prices of younger flats."

A version of this article appeared in the print edition of The Straits Times on November 07, 2019, with the headline 'Slower price decline for younger and older HDB resale flats in Q3'. Print Edition | Subscribe