SINGAPORE (EDGEPROP) – The rise in suburban property prices is reflected in the HDB resale price index, which increased 0.4% q-o-q, according to latest flash estimates for 4Q2019. This was slightly higher compared to the 0.1% q-o-q increase in 3Q2019, demonstrating that “price recovery in the public housing market is on a firmer footing”, says Nicholas Mak, director of research & consultancy at ERA Realty Network.
HDB resale price index rose by 0.4% q-o-q in 4Q2019, after a 0.1% uptick in 3Q2019 (Photo: Samuel Isaac Chua/EdgeProp Singapore)
The latest uptick marked the second consecutive quarter of resale price increases, and the largest quarterly increase since 2Q2013, when it was up 0.5%, says Christine Sun, head of research, OrangeTee & Tie.
Policy changes, new initiatives
The HDB resale price index is expected to continue its gradual growth in 2020 on the back of policy changes and new initiatives announced by the government in May 2019, such as the introduction of Enhanced Housing Grant and changes in the use of CPF funds for the purchase of older HDB flats, adds ERA’s Mak.
These policies have improved the attractiveness and demand for older flats. This led to an increase in transaction volume islandwide in 2Q2019 and 3Q2019, as well as price increases of older flats in some of the HDB towns, notes OrangeTee’s Sun.
“The various policies seemed to have achieved their goals in improving the demand for different flat types and mitigating further price falls that were mainly caused by the lease depreciation of older flats and an increasing supply of HDB flats,” adds Sun.
On the ground, transactions have increased. See table below:
Source: Data.gov.sg, OrangeTee & Tie Research & Consultancy
Price and transaction volume forecast
Sun estimates transaction volume of HDB resale flats for the whole of 2019 to be in the range of 21,500 to 22,000 units, and is projecting the volume this year to be between 23,000 and 24,000 units. She is forecasting HDB resale prices to grow by between 0% and 2% for the whole of 2020.
Likewise, Lee Sze Teck, director of research for Huttons Asia, is projecting HDB resale transaction volume to be in the 23,000 to 24,000 range and for HDB resale prices to see a 0% to 2% increase this year.
Ismail Gafoor, CEO of PropNex Realty, is expecting HDB resale prices to increase by 1% to 2%, and 25,000 resale flats to change hands for the full year in 2020.
As for ERA’s Mak, he is forecasting that the HDB resale price index will increase by 1.5% to 2.5% in 2020. On the other hand, he expects the private housing price index to see a “more muted pace” increase of 2% to 3% this year, as the various property cooling measures are still in place.
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