HDB resale price up 1.3% in Q2 2012

SINGAPORE: HDB’s flash estimates showed that resale prices rose by 1.3 per cent in the second quarter of this year, reversing a trend of slow price growth in the previous two quarters.

HDB resale prices have been softening since the second half of last year. Prices grew 3.8 per cent in the third quarter of 2011. This growth moderated further to 1.7% in the last quarter of last year, and fell to 0.6 per cent in the first quarter of 2012 — the smallest increase since Q3 2006.

HDB will release the resale price index for the full (Q2) quarter later this month on July 27.

The board said it is committed to offer 25,000 new flats under its Build—To—Order (BTO) scheme in 2012.

But analysts said this is not affecting resale flat prices because most of the BTOs are still being built.

Senior Vice President of local property firm PropNex, Lim Yong Hock, said: "There’s still a wait so the impact won’t come in so soon. The impact will probably come in about one to two years’ time, when most of the BTOs are ready, and there’ll be more resale units in the market. Currently there’s still a shortfall of supply in the resale market."

In the first half of this year, HDB had offered 12,703 flats under BTO exercises, and 3,825 flats under a Sale of Balance Flats exercise.

For July 2012, HDB will be offering about 5,200 new flats for sale — in Bedok, Bukit Merah, Choa Chu Kang, Clementi, Geylang, and Punggol.

In the private property market, prices rose by 0.4 per cent in the second quarter of 2012.

This rebound comes after a short—lived fall in prices of 0.1 per cent in the last quarter.

Mr Lim said the rebound is partly because of several record—breaking projects that were recently launched.

He said: "The developers, looking at the situation, they’re not really adjusting the price downwards, taking advantage of the low interest rate as well as the good economy. Another reason is because land prices are also not coming down, the bids for land are on an average S$500 per square foot.

"In the long run we may not see a substantial drop in price, and developers can have the holding power to hold on (to high prices)."

—CNA/ac