Q: Many real estate agents have complained that HDB resale flats are harder to sell now and the cash-over-valuation (COV) portion are coming down. Is the party for HDB resale boom OVER?

A: As I said in the previous issue of this magazine, it is anybody’s guess how the HDB resale market will pan out in the on-going recession. But, the HDB resale market has just received a massive boost from the new initiative to increase the maximum Additional Housing Grant from S$30,000 to S$40,000 and to allow household with total income of S$5,000 to take advantage of the assistance scheme.

I have followed up on a case study which I did last year on the HDB resale price trend. The January 2009 figures are just in and let’s compare the figures and see if the worries are unfounded.

Case study on price trend of 3-room flats across the heartlands

Table [1] – Price trend of 3-room flats in the Central area - Bt Merah Estate

Note: Prices went up marginally despite deepening crisis

Table [2] – Price trend of 3-room flats in the Central area -  Geylang / Eunos Estate

Note: Median price was a fraction down, but the lowest price had gone up to all time high.

Table [3] - Price trend of 3-room flats in the North East area – Hougang estate

Note: Median price went up significantly despite deepening crisis

Table [4] - Price trend of 3-room flats in the North Western area – Choa Chu Kang estate

Note: Prices went up – interestingly, there were only two 3-room flats transacted – signalling low supply.

Table [5] - Price trend of 3-room flats in the North area – Woodlands estate

Note: Median price went up significantly in one of the largest working-class estate.

Finding of case study on 3-room flats

Smaller flats are often in high demand during difficult times, as they are cheaper to maintain and to buy. As the recession deepens and more people are laid off, the demand for such flats is set to increase. As smaller flats are often in short supply, resale prices will stay firm throughout the year.

Case study on price trend of 4-room flats across the heartlands

Table [6] – Price trend of 4-room flats in the Central area - Bt Merah Estate

Note: Median price came down marginally, but the highest price shot to all-time high in January 09.

Table [7] – Price trend of 4-room flats in the Central area – Geylang / Eunos Estate

Note: Median price is significantly lower, but lowest price is now at all-time high

Table [8] – Price trend of 4-room flats in the North East area – Hougang estate

Note: Lowest price went up significantly to hit all-time high while median price is also at all-time high

Table [9] – Price trend of 4-room flats in the North Western area – Choa Chu Kang estate

Note: Median price of 4-room flats in CCK is now at all-time high

Table [10] – Price trend of 4-room flats in the North area – Woodlands estate

Note: 4-room flat prices in Woodlands are also at all-time high

Finding of case study on 4-room flats

The crisis actually exacerbated the demand for 4-room flats in matured heartland estates. Despite the festive season where the overall HDB resale transactions were down, the demand for 3-room and 4-room flats were actually up, albeit marginally.

Case study on price trend of 5-room and executive flats across the heartlands

Table [11] – Price trend of 5-room flats in the Central area - Bt Merah Estate

Note: While the highest and median prices have come down significantly, the lowest price is now at all-time high

Table [12] – Price trend of 5-room flats in the Central area – Geylang / Eunos Estate

Note: The highest price in the central area has come down significantly to 2006 level as the bull-run prices were unsustainable today

Table [13] – Price trend of 5-room flats in the North East area – Hougang estate

Note: The lowest price is at all-time high, but the highest price has come down from $460K.

Table [14] – Price trend of 5-room flats in the North Western area – Choa Chu Kang estate

Note: The lowest price is at all-time high, but the highest price has eased. Median price is also at all-time high.

Table [15] – Price trend of 5-room flats in the North area – Woodlands estate

Note: The prices of 5-room flat are at all-time high in Woodlands

Case study on price trend of executive flats across the heartlands

Table [16] – Price trend of Executive flats in the Central area – Geylang / Eunos Estate

Table [17] - Price trend of Executive flats in the Central area – Hougang Estate

Note: The lowest price is at all-time high but the median price is marginally lower.

Table [18] – Price trend of Executive flats in the Central area – Choa Chu Kang Estate

Note: The lowest and median prices are at all-time high.

Table [19] – Price trend of Executive flats in the Central area – Woodlands Estate

Note: All the prices are at all-time high in Woodlands.

Finding of case study on larger flats

Except flats located nearer to the Central Business District (CBD), HDB resale prices in sub-urban areas are still holding firm – though the quantum of the price increases has clearly narrowed, due to the uncertain times ahead.

The sample areas chosen for this case study are popular estates and have traditionally enjoyed very good demand.

Prepared by Sam Gian - Independent Real Estate Sales Trainer