From February this year, resale HDB flat prices have been gaining traction. But last month, prices did an about-turn and fell 0.8%.
Resale HDB flat prices 2.4% lower than April 2017
In a year-on-year comparison, resale HDB flat prices were 2.4% lower last month than the same month a year ago. From the peak of April 2013, prices have fallen 13.5%. The decline could be due to a recovering private property market with more HDB upgraders looking to enter the market before the prices climb any further.
Prices of resale flats in mature HDB estates fell the steepest with a 1.5% decline. In non-mature estates, prices fell 0.2% in comparison. The realization that older flats may not be a definite inclusion in the Selective En-bloc Redevelopment Scheme (SERs) and prices of these units are depreciating as they age, may have pushed prices of flats in mature estates down.
Larger flats finding it more difficult to command high prices
Resale flats sales volume fell as well. 1,850 units sold in April, down 2.5% from the 1,897 units sold in March. Larger HDB flats are finding it harder to secure buyers quickly. Prices of executive flats and 5-room flats fell 1.2% and 0.5% while 3-room and 4-room resale flat prices fell 0.3% and 0.4% respectively.
Property analysts are putting the decline of resale HDB flat prices and transaction volume to the ready supply of new Build-to-order (BTO) flats last and this year. 17,584 BTO flats were launched last year and this year an estimated 17,000 units will be launched in total.
With the success of land sales and en bloc sales last and this year, the private market has certainly been benefitting. But will there be a trickle-down effect on the HDB market as these displaced homeowners search for new units?