Resale flat transactions down 3.2% in 3rd quarter, Latest Business News - The New Paper

Resale flat transactions down 3.2% in 3rd quarter

This article is more than 12 months old

Following a four-year high, Housing Board resale flat transactions fell by 3.2 per cent in the third quarter over the previous quarter, said HDB yesterday.

There were 5,808 cases in the third quarter, down from 6,001 in the second quarter. Resale flat transactions in the third quarter rose by 5.3 per cent compared with the same period last year.

According to HDB data, resale flat prices continued falling, with the index dropping 0.7 per cent in the third quarter this year over the previous quarter.

The third-quarter decline is also the biggest quarterly fall since the first quarter of 2015, when prices fell 1 per cent.

Resale flat prices have been on a gradual decline since 2013.

Dr Lee Nai Jia, head of research at Edmund Tie & Company, said the fall was due to the drop in prices of older HDB flats, especially those with less than a 60-year lease in mature estates.

"There are concerns that value will continue to depreciate, especially after National Development Minister Lawrence Wong cautioned home buyers not to assume that old HDB flats will be automatically eligible for the Selective En Bloc Redevelopment Scheme," said Dr Lee.

Mr Eugene Lim, key executive officer of ERA Realty Network, expects any dip in the HDB resale market to be short-lived, given the "recent exuberance in the private residential market".

He added that there may be more demand in four to six months, with some owners of private collective sale units, especially retirees, buying resale flats as "replacement units".

Of the fall in resale transactions, Mr Lim said the new Re-Offer of Balance Flats scheme and shorter waiting time for Build-To-Order flats could have diverted demand from the resale market.

Mr Ismail Gafoor, chief executive of PropNex Realty, said the increase in supply of public housing is likely the driving force for the dip in the resale price index. He added that more HDB owners are upgrading to executive condos and private properties, further increasing the supply of resale flats.