Apr 25, 2014
Resale flat prices are continuing on a downward trend, falling by 1.6 percent in the first quarter of 2014, according to fresh data from the HDB.
This marks three consecutive quarters of price decreases from 2013 (the index dipped 0.9 percent in Q3 2013 and 1.5 percent in Q4 2013).
At the same
time, resale transactions dropped by five percent from 4,001 cases in Q4 2013
to 3,781 cases in the first three months of this year.
According to
PropNex Realty, this is the result of measures imposed last year to cool the
market and a continued supply of new flats.
“The recent
HDB’s change to the valuation procedure will also create a cautious approach
from buyers, and I foresee them being more careful when giving an offer for a
particular flat. This will further increase a downward pressure on resale
prices in the coming quarters,” said Mohamed Ismail, CEO of PropNex.
He does not
expect to see a turnaround this year due to the looming flood of new homes and
the impact of existing measures such as the lower mortgage servicing ratio
(MSR), shorter loan tenure and a minimum three-year waiting period for PRs
wanting to buy HDB resale flats.
“Home buyers
are now more restrained as they have to think twice if their MSR is over 30% or
TDSR (Total Debt Servicing Ratio) is near 60%. In summary, home buying is more
complicated, and have discouraged many. Loan curbs and softer prices will
ultimately mean that HDB upgraders have less to spend on their next property as
their purchasing power is being eroded,” he added.
Ismail
believes that resale HDB prices will drop by between six to eight percent in
2014.
Info courtesy - Propertyguru.com.sg
