Pick-up in resale flat prices 'will be slow'

Experts said the new grant and the higher income ceilings for resale flats will draw more buyers, especially in mature estates.
Experts said the new grant and the higher income ceilings for resale flats will draw more buyers, especially in mature estates. ST PHOTO: KUA CHEE SIONG

Resale prices of Housing Board flats rose slightly last month, sticking to their relatively flat trend in recent months.

While experts said the market might pick up with the new housing policies announced at the National Day Rally, they maintained that any recovery will be slow because of the cooling measures still in force. Overall, prices inched up 0.3 per cent from July to last month, according to the latest figures from SRX Property.

This was led mainly by the prices of four- and five-room flats, which increased by 1.4 per cent and 0.9 per cent respectively.

Prices of three-room and executive flats, however, slid by 0.7 per cent and 2 per cent respectively.

Compared with a year ago, prices have dipped 3 per cent, and are down 11.3 per cent since their peak in April 2013. The number of transacted units, however, dropped by 6.8 per cent. There were 1,447 flats sold last month, down from the 1,552 that changed hands in July.

ERA Realty key executive officer Eugene Lim said this decrease in volume was expected.

"August coincides with the onset of Hungry Ghost Festival (on Aug 14) and some people prefer not to buy properties during that period," he explained. Mr Lim added that the year-on-year volume growth of 9 per cent is "more telling that buyers are entering the market".

Experts said the new Proximity Housing Grant (PHG) and the higher income ceilings for the Central Provident Fund Housing Grant for resale flats, both introduced last month, will draw more buyers, especially in mature estates.

The $20,000 PHG is offered to all Singapore citizen families who buy a resale flat to live with or near their parents or married child. Eligible singles will also get $10,000 if they buy a resale flat with their parents. Said R'ST Research director Ong Kah Seng: "There will be more buyers who will be getting a flat near parents due to the grants."

However, as long as cooling measures remain, resale prices will not go up by much, analysts said.

"We do not think sellers are in a position to take advantage of this by increasing prices as buyers nowadays are more prudent in their price negotiation. Most will make an offer based on recent transacted prices," said Mr Lim.

Mr Ong said: "Buyers will still eventually evaluate their housing requirements and the unit holistically... instead of rapidly tapping the grant to snap a flat near their parents."

A version of this article appeared in the print edition of The Straits Times on September 04, 2015, with the headline 'Pick-up in resale flat prices 'will be slow''. Print Edition | Subscribe