The Housing Board has revised their plans to roll out 17,000 new BTO flats this year. They have reduced the numbers by 1,000 to 16,000 in view of stabilising resale HDB flat prices.
1,000 less BTO flats to be released this year
The resale HDB flat market has been languishing for a rather prolonged period of time, but it seems things are finally picking up. Resale flat prices rose for the first time in 6 consecutive quarters.
Resale flat prices fell 0.8% in Q1 this year and last quarter showed a 0.1% rise in resale flat prices last quarter in comparison with Q1. Prices have remained level or occasionally fluctuated downwards since Q3 of 2016. Q2’s prices, however, remain 1.5% lower than the same period last year.
Has the resale HDB flat market finally bottomed out? And will things pick right back up?
Some industry watchers are expecting prices to rise slightly in H2, boosted mainly by homeowners who may need a new place to stay following the hash of en bloc sales last and this year. Others, however, do not expect prices to rise more than 1.5% this year, with the market likely to take the year to stabilise further.
The new BTO flat count this year currently stands at 11,373 units already released. In August, the launch will feature 4,300 BTO flats in Punggol and Yishun. The decrease in the number of BTO flats launched may or may not push resale prices up as buyers may now have more options available to them.
Newer flats with ideal premiums likely to still command high prices
While the resale flat market may grow slightly due to demand from “displaced en bloc owners”, these buyers are often cash rich from the yields from their collective sales and have more options open to them. They may prefer newer flats with premiums such as unblocked views, higher level placements, larger floor areas and prime locations. Prices of older flats with shorter leases may, however, continue to fall.
The private home segment has on the other hand been doing well. Private home prices rose 3.4% in Q2, following their 3.9% rise in Q1. Landed home prices have similarly risen 3.8%. Non-landed home prices rose 3.3%.