HDB resale prices dipped in the last quarter of 2017. Over the entire year, prices fell 1.5%, a much steeper decline than the 0.2% dip in 2016. The rate of decline has however been decreasing quarter on quarter. Q4 saw a 0.2% dip which was gentler than the 0.7% dip in Q3.
Will HDB prices stabilise or pick up this year?
This year, HDB has announced that they will be releasing about 17,000 build-to-order (BTO) units, on par with last year.
How will this compute for the HDB market as more private properties reach completion and more HDB upgraders may be looking to sell their flats in the resale market?
Most of the resale transactions from 2017 were by HDB owners who were upgrading to private properties. With the number of successful collective sales in the market last year, the demand for resale HDB flats might rise as this pool of buyers may consider public housing over private.
Related: A peek into the 2018 property market
Older HDB flats often have a larger floor area and psf price in comparison to newer private properties. Some of these buyers could also be looking at downgrading and having more cash on hand for retirement for example.
Resale market still the go-to for some buyers
The positive market sentiments from last year are expected to carry on to this year. While a big rebound in the HDB resale segment is not likely, prices are expected to stabilise with a possible increase of 1% to 2%.
The shorter waiting period and increased housing grants may have impacted the demand for resale HDB units. But there is still a pool of buyers who either do not qualify to purchase a new flat or have urgent housing needs.
The new HDB resale portal has also shortened the processing time for securing a resale flat. While that could push for more transactions, buyers are likely to still want a confirmation from HDB on the flats’ market values.