Thursday, April 06, 2006
HDB resale market seen flat for year: analysts
SINGAPORE : Prices of HDB flats have spiked down since the Housing Development Board's anti-cashback measures came into effect one year ago.
As an indication, the HDB index of resale flats has fallen by a sizeable 4.8 percentage points and analysts say they are not expecting much upside this year.
Back in the first quarter of 2005, the HDB resale index stood at 106.7.
But that was before the HDB clamped down on the cashback scam under which some HDB home-buyers fraudulently inflated the purchase price to get a larger loan quantum for their flat.
The impact of the measures was clear to see. At the end of the next quarter, the HDB resale index fell by 5.1 points.
After dipping a further 0.4 point in the third quarter of 2005, the index has been edging up again.
But analysts say they don't see much upward potential and do not expect gains of more than half a percentage point for this year.
"The previous buffed-up level caused by the shady cashback deals has been taken out of the market. Right now, what we are seeing is actual supply and demand conditions. We may continue to see a flat market for the rest of the year because there is a lot of supply in the market. HDB is still trying to clear its unsold stock of flats. Generally, people will take this opportunity to upgrade from smaller flats to bigger flats, said Eugene Lim, assistant vice president of ERA Realty.
While 3-room flats were in great demand during the lean years, ERA says people are now opting for 4-room and 5-room flats again as the economy improves.
The price gap between 4-room and 5-room flats has also narrowed to as little as $50,000.
For example in Woodlands, a 4-room flat costs about $220,000 but a 5-room flat costs just $50,000 more.
Likewise in Tampines, a 4-room flat can cost $250,000 but $50,000 more will get you a 5-room unit.
Another incentive to go for the bigger 4-room and 5-room flats is that HDB concessionary loans are available only for people who upgrade, such as those who sell a 3-room unit to buy a 4-room or bigger flat.
Those who stick to same-sized flats or downgrade have to settle for loans at market rates with private banks.
Analysts also say that another reason why HDB resale flat prices will not stir much this year is that valuations on prospective HDB transactions are now done by a list of HDB-approved valuers resulting in a more disciplined environment.
- CNA /ls
As an indication, the HDB index of resale flats has fallen by a sizeable 4.8 percentage points and analysts say they are not expecting much upside this year.
Back in the first quarter of 2005, the HDB resale index stood at 106.7.
But that was before the HDB clamped down on the cashback scam under which some HDB home-buyers fraudulently inflated the purchase price to get a larger loan quantum for their flat.
The impact of the measures was clear to see. At the end of the next quarter, the HDB resale index fell by 5.1 points.
After dipping a further 0.4 point in the third quarter of 2005, the index has been edging up again.
But analysts say they don't see much upward potential and do not expect gains of more than half a percentage point for this year.
"The previous buffed-up level caused by the shady cashback deals has been taken out of the market. Right now, what we are seeing is actual supply and demand conditions. We may continue to see a flat market for the rest of the year because there is a lot of supply in the market. HDB is still trying to clear its unsold stock of flats. Generally, people will take this opportunity to upgrade from smaller flats to bigger flats, said Eugene Lim, assistant vice president of ERA Realty.
While 3-room flats were in great demand during the lean years, ERA says people are now opting for 4-room and 5-room flats again as the economy improves.
The price gap between 4-room and 5-room flats has also narrowed to as little as $50,000.
For example in Woodlands, a 4-room flat costs about $220,000 but a 5-room flat costs just $50,000 more.
Likewise in Tampines, a 4-room flat can cost $250,000 but $50,000 more will get you a 5-room unit.
Another incentive to go for the bigger 4-room and 5-room flats is that HDB concessionary loans are available only for people who upgrade, such as those who sell a 3-room unit to buy a 4-room or bigger flat.
Those who stick to same-sized flats or downgrade have to settle for loans at market rates with private banks.
Analysts also say that another reason why HDB resale flat prices will not stir much this year is that valuations on prospective HDB transactions are now done by a list of HDB-approved valuers resulting in a more disciplined environment.
- CNA /ls
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// posted by Shajahan @ 10:52 AM 