Resale flat market hots up again
Prices of HDB resale flats are starting to sizzle again, after having grown at a slower pace in the last three quarters. Fresh figures from the HDB, signalling that the red-hot housing market will take some time yet to stabilise, showed resale flat prices rose 3.1% to a fresh record in Q2. The rate of increase was only 1.6% in Q1. The median cash premiums paid to sellers, called COV, also reached eye-popping levels. In Marine Parade, for example, the median COV for five-room flats hit $95,000 in Q2, up from the $28,800 in the 1st. In Clementi, median COV for executive flats was $94,000, up from $20,000 in Q1.
In the previous quarter, it was $21,000. But figures from property agencies obtained by The Straits Times do indicate a spike in median COV in Q2 to about $32,000. Property agency PropNex said yesterday that its July numbers show overall median COV to have reached $36,000.
Yesterday's numbers also reverse a moderation in the rate of increase of prices seen in the last 3 quarters, when price growth dropped from 4% in Q3 last year to 2.5 % in the 4th price growth was 1.6 % in the 1st 3 months of this year. Analysts noted that the previous estimates for Q2, at 2.9 %, indicate that resale flat prices inched up towards the end of last month. This could spell further price increases until the end of the year.
The rise in private home prices continued to rise by 2 % in the April-to-June quarter, from 2.2 % in the previous 3 months.
ERA Realty key executive Eugene Lim attributes the price pressure in the HDB market to the shortage of resale flats. This coupled with stringent rules introduced last Aug that bar concurrent ownership of HDB flats and private properties in the 1st five years of owning an HDB flat, may explain why HDB's figures show the number of resale flats that changed hands rose by 6 % to 6,581 transactions in Q2. Dennis Wee Group director Chris Koh said this fierce demand was 'in line with expectations', as 2nd and 3rd quarters are generally stronger. Although the HDB has aggressively ramped up supply in the past two years, it will be some years before each batch of these flats reaches the resale market.
Source : The Straits Times, 23 Jul 2011
| Back to Top |