HDB Resale Market to Moderate : HDB Buyers May See Lower Price

At the start of 2008, analysts were so upbeat about the HDB resale market that they proclaimed "HDB the Real Estate King of 2008". But that seems to have changed now as we approached the second quarter of 2008, according to Knight Frank director, research and consultancy, Nicholas Mak. The gloomy economic outlook it seems may take a toll of even the most positive sector of the real estate market.

Knight Frank director, research and consultancy, Nicholas Mak said ‘If the local economy were to slip into a recession in 2008, overall prices of HDB resale flats could vary between a 2 per cent contraction and a 3 per cent growth for the year.’

Mr Mak expects that median COV of all resale flats, which fell to $21,000 in Q1′08 from $22,000 in Q4′08, to fall further this year.

In January, City View @ Boon Keng, under HDB’s Design, Build and Sell Scheme (DBSS), pushed prices to $727,000 for a five-room unit. While the launch generated a lot of buzz, at end March 2008, 250 of the 714 flats were still unsold.

‘The issue that arises is the validity of the pricing of such DBSS flats. Keeping in mind that there are more of such developments proposed in places like Ang Mo Kio, Bishan, Toa Payoh, Simei and Bedok, and given that they are still bound by public housing rules such as the income ceiling of buyers, one could begin to wonder about the intrinsic affordability of public housing initiatives,’ Mr Mak said.