Tuesday, July 1, 2008

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HDB Resales Price Up 8.2% in First Half of 2008: HDB Flash Estimate

HDB Resales Market shows a strong growth of 4.4% in Q2 of 2008, higher than the 3.7% in the last quarter. All in all, HDB resales price is up 8.2% in first half of 2008. Considering all the surrounding economic uncertainties, the increase of 8.2% is very significant and reflects a real shortage of affordable housing in the current market.

The following is an excerpt of HDB's report:
Flash Estimate of 2nd Quarter 2008 Resale Price Index and Upcoming New Flat Supply
HDB’s flash estimate of the 2nd Quarter 2008 Resale Price Index (RPI) is 131.7, an increase of 4.4% over the previous quarter. This is slightly higher than the 3.7% increase in 1st Quarter 2008. For the 1st half of 2008, the RPI increased by 8.2%.

The upward trends for HDB resales price may continue as more home buyers turn to this market segment for their basic housing needs in a time plagued by high inflation and economic uncertainties. As I've explained in the post "HDB and private property prices may trend in opposite directions", we may very well see a closing of price gap between HDB resales flats and mass market condos in the months ahead.

As for HDB supply, in the first half of 2008, HDB has launched a total of 4,524 new flats. HDB said that it has planned another 3,900 new flats under the BTO system over the next 6 months in towns such as Punggol, Sengkang and Bukit Panjang. The total planned BTO supply of 8,400 new flats in 2008 will surpass the annual BTO supply in 2007 (6,000 units) and 2006 (2,400 units).

The government has assured the people that they'll continue to build as many HDB flats as the demand determines, though Minister of National Development Mah Bow Tan has also repeatly stressed that HDB does not want to over-supply. The balancing act may be a delicate one. If a significant percentage of the demand has come from HDB upgraders, then supply of resales HDB flats will increase when these upgraders get their new flats. Would this then cause an over-supply 2-3 years down the road ?

May also want to read:
History of Singapore Property 1960 to 2008
Buy or Not Buy: How to decide amid mixed market signals
When to Buy, When Not to by
Property Price Index Graph Plotter & Online Property Valuation
Your Property Investment Determines Your Financial Success in Your Life
HDB Resales: West Sees Highest Price Increase


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