HDB resale prices to soften
PROPERTY consultant ERA expects the resale prices of HDB flats to ease further this year and, as prices stabilise, more first-time buyers could return to the resale market.
"Our projection is for resale HDB prices to soften by 5-8 per cent over the whole of 2014," ERA said.
"As prices stabilise some more, and are well supported by valuations, we may see the return of more first-timers to the resale market; especially those who do not want to wait the three years for their BTO flats," it added.
ERA's comments came after the Singapore Real Estate Exchange (SRX) April 2014 HDB Flash Report revealed yesterday that the resale prices of HDB flats fell marginally by 0.2 per cent last month, compared with March.
The report also showed prices of executive flats rose 1.2 per cent. Compared with a year ago, prices last month are down 5 per cent.
"This shows that sellers have become more realistic about the selling prices due to the 30 per cent cap for the MSR on buyers. This is especially so for the bigger flats, as some buyers may have difficulty getting loan approval due to the MSR of 30 per cent," ERA said.
The MSR, or mortgage servicing ratio, measures the percentage of a person's gross income that can go towards home loan repayment every month. The government cut it to 30 per cent from 35 per cent last year.
ERA noted that buyers are very conscious of the total price quantum as they have to balance their real estate needs with the approved loan quantum.
Other agents and experts also said prices will keep falling but will eventually stabilise.
OrangeTee head of research and consultancy Christine Li expects prices to fall by 5-7 per cent over the whole year.
According to HDB resale data compiled by SRX, 1,484 HDB flats were sold in last month's resale market, a 4.4 per cent increase from March, making it a nine-month high since July.
However, last month's resale volume is still 14.4 per cent lower, compared with the 1,733 units resold last year.
THE BUSINESS TIMES, THE STRAITS TIMES