Published 29 January 2011
The Business Times
By Uma Shankari
Up to 22,000 new flats may be offered under the build-to-order system
HDB resale prices rose by 2.5 per cent in the fourth quarter of 2010 – a tad higher than the 2.4 per cent climb estimated earlier this month – even as the number of deals and the cash-over-valuation (COV) amounts commanded by flats fell.
Data from the Housing & Development Board (HDB) released yesterday showed that the official resale price index climbed to yet another new high in Q4 2010. For the whole of 2010, HDB resale prices rose by 14.1 per cent.
Prices rose even as the median COV amount among all resale transactions fell by $7,000 (or 23 per cent) from $30,000 in Q3 2010 to $23,000 in Q4 2010.
But prices still rose as valuations of most types of HDB flats climbed in Q4, analysts said.
The number of resale transactions fell by about 21 per cent, from 8,205 in Q3 2010 to 6,454 in Q4 2010. The total number of resale transactions in 2010 fell to 32,257, a decline of 13 per cent over 2009’s volume.
Analysts said that HDB flat valuations still increased in Q4 2010, in spite of a number of cooling measures introduced in August 2010, as there is usually a lag time of about six to eight weeks before price corrections would align with the actual sentiment in the market.
But resale prices could soon plateau, PropNex chief executive Mohamed Ismail said.
HDB’s Q4 2010 data shows that median resale prices of 3-room, 4-room, 5-room and executive flats stood at $300,000, $385,000, $460,000 and $548,000 respectively, he said.
But PropNex’s in-house data for deals done in January shows median resale prices of $298,000, $393,000, $466,000 and $538,000 respectively – a 1.8 per cent drop to 2.1 per cent increase from Q4 2010.
‘It must also be highlighted that some of our data reflects transactions that took place before the additional cooling measures announced on Jan 13, 2011,’ added Mr Mohd Ismail. ‘Feedback from the ground has indicated that there is less movement among the current HDB dwellers due to the (new) 60 per cent loan-to-value (LTV) cap. Therefore, it is possible to see a further dip, though not drastic one, for median COVs and sales volume in Q1 2011.’
HDB plans to offer up to 22,000 new flats under the build-to-order (BTO) system if demand is sustained.
The BTO supply will also be supplemented by the upcoming supply of flats under the design, build & sell scheme (DBSS) and the executive condominium (EC) housing scheme. Four more EC developments in Punggol, Pasir Ris, Bukit Panjang and Tampines will be launched for sale in the coming months by private developers.