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    Mar 02, 2015

    Sold: 10% of new resale flats as owners 'get real'

    THE Housing Board resale market may be sliding, but that did not stop a greater proportion of owners from selling their new flats once they could.

    Last year, one in 10 flats that became eligible for resale - having reached the five-year minimum occupation period (MOP) - were sold within a year, according to HDB figures.

    This is in contrast to 2013, when only 5.5 per cent of flats were resold within a year of reaching the MOP - a large drop from preceding years.

    HDB resale prices began to fall only in the second half of 2013, and home owners might have held on to their flats to see where the market was headed, said experts.

    But last year, prices fell steadily every quarter for a full-year drop of 6 per cent.

    "Things became much clearer," said PropNex Realty chief executive Mohamed Ismail Gafoor.

    Home owners might thus have decided to accept the current prices as they feared that flat values would only get lower, said Wong Xian Yang, OrangeTee's manager of research and consultancy.

    Such a fear would be in line with experts' predictions of a single-digit fall in prices this year.

    As for why owners were willing to sell at all, Mr Wong said those who bought directly from HDB are still "sitting on large profits of at least over 70 per cent".

    Mr Ismail added that private home prices also fell last year, allowing sellers to upgrade.

    "In 2014, we saw the greatest discounts in many new private launches," he said.

    In 2013, 470 out of 8,521 eligible flats were resold.

    Last year, there were 485 flats resold. But this was out of a much smaller pool of 4,497 newly eligible flats, thus representing a higher proportion.

    The similar figures might reflect the number of units that the resale market can absorb, said R'ST Research director Ong Kah Seng.

    There were 17,318 resale deals in total last year, down 4.3 per cent from 2013 and the fewest since 1997.

    There might also have been owners in 2013 who wanted to sell, but did not succeed.

    Still, these are secondary reasons for the higher proportion of flats resold last year, he added.

    "The main reason is still due to owners who are increasingly realistic about the selling price of their flat."

    Besides selling, home owners can also sublet their units for rental income after the MOP is reached.

    But with rents staying flat last year, fewer home owners did so.

    Last year, just 169 units or 3.8 per cent of newly eligible flats were sublet within a year of reaching the MOP.

    This was down from 412 units or 4.8 per cent in 2013.

    According to SRX Property's rental index, HDB rents dropped 2.1 per cent over the whole of last year.