July 26, 2011

Market watchers said the HDB resale flat prices will likely hold for the rest of the year amid an imbalance between supply and demand.

Over the weekend, the National Development Minister said it would take three to five years to “substantively resolve” the problem of high resale flat prices and for prices to stabilise.

Prices of resale HDB flats have been heading north, rising nearly 5 per cent in the first half of this year.

Mohd Ismail, PropNex CEO, said: “For the first half of this year, we had a total of about 12,800 transactions.

“For the same period last year, there were 17,000 transactions.

“There is less motivation for people to put their property on the market. People find it difficult to upgrade to an executive condo or a private property because of the new requirements.”

Chris Koh, DWG Director, said: “Two main groups of people are holding back on selling.

“One of the group whereby they have an HDB and a private property at the same time and they will not want to sell their HDB. They’ve chosen to keep their HDB and move into their private property.

“They know that if they ever sell their HDB flat, next time if they want to buy an HDB flat, they are forced to sell their private property. So they rather stay in their private property and rent out their HDB flat.”

Minister Khaw Boon Wan had written on his blog that first timers and second timers formed the bulk of resale flat buyers in May at 23 per cent and 34 per cent respectively. The other buyers were singles (15 per cent), private property owners (8 per cent) and permanent residents (20 per cent).

And on July 24, he urged potential upgraders to hold on instead of entering the market now as prices are “too high” and would regret if they do so.

But for some, waiting is not an option.

A man on the street said: “I need to register my kids for primary 1, then after that I intend to move, once I get the school.

“BTO, I have to wait for a few years. By that time my kids will be in primary 3 or 5 already. So my case, I have no choice but to buy the resale flat.”

The National Development Minister said there are plans to release more new flats to increase the chance of selection, which he believes, will help relieve some anxiety in the market.

Source : Channel NewsAsia – 26 Jul 2011