- HDB Resale Prices has increased by 3.8% as compared to the previous quarter
- Resale transactions fell by 10% from 6,581 cases in the second quarter to 5,903 cases in the third quarter.
- Overall increase from Q3 2011 is 11.6%, which is an all-time high, i.e. HDB resale prices has been increasing at an average of almost 3% per quarter.
- Since Q1 this year, the quarterly price increase has accelerated, despite HDB’s largest release of new flats this year and next.
- HDB may have increased the supply of new flats launched and it has attracted many first time buyers who are not in a hurry to buy since there is a waiting time of 3 years.
- Demand in the resale market is strong and continues to be strong because it is coming from first-timers and families that have immediate housing needs, singles, PRs, up-graders and down-graders. These buyers make up almost 80 per cent of the resale market.
- On the supply side, the crunch in the resale market continues to cause prices to go up, and this is worsened by the mindset that sellers add on a cash-over-valuation (COV) component despite increasing valuations. They are able to do this as supply is tight and demand is strong.
- Weakened resale transaction volumes is expected by ERA not solely because more buyers have crossed over to the BTO (build-to-order) market. The lack of supply and high prices have made it more difficult to conclude deals.
- HDB will launch 4,200 BTO flats for sale in various towns such as Bedok, Bukit Panjang, Hougang, Punggol and Yishun next month.
- Including units sold under the Sale of Balance Flats (SBF) Exercise in September 2011, HDB’s total flat supply for 2011 will be 28,000 units.
- For 2012, prospective flat buyers can look forward to another 25,000 BTO flats. HDB said more details on that will be given at the launch.
- One reason that the housing supply is tight is that some of the current policies do not incentivise HDB owners to sell.
- A 2003 rule allowing them to rent out their flat, has prompted upgraders to move to a private apartment while keeping their HDB for rental income. And last August, restrictions on dual home ownership meant that those who already own a private home and a HDB flat, were even more reluctant to sell their unit. High rentals have also encouraged owners to hang on to their flats.
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