Just as URA announced the price statistics of private properties, Housing Development Board (HDB) has released The 2nd Quarter 2012 Public Housing Data yesterday which shows a HDB’s Resale Price Index (RPI) increase from 191.6 in 1st Quarter 2012 to 194.0 in the 2nd Quarter 2012. Although this is less than the speed of price increase in Q2 2011 (which was 3.1%), an increase of 1.3% over the previous quarter is twice the speed of 0.6% of Q1 2012 q-o-q increase!
Resale HDB flat transactions increased by about 19% from 5,900 cases in 1st Quarter 2012 to 7,000 cases in 2nd Quarter 2012:
Singaporeans whose household income is more than 10,000 SGD cannot directly buy from HDB and need to go to resale market to buy a public housing flat. This demand is combined with the increased number of Singapore PRs who can only buy from resale market and private property downgraders who are cashing out their private property. Supply situation is also not helping, HDB has underbuilt public flats in 2000s and although the speed is up from 8,000 units per year to 25,000 units per year, these flats has 7+ years to hit the market (2-3 years to be completed and 5 years of minimum occupancy).
Ultra high rental cost is one of the main reasons people are rushing out to buy resale flats although the prices are so high. A good HDB flats costs around 2,200+ SGD per month now which translates into 26,000 SGD per year bleeding from your pocket per year. This lets people to rush to ownership of the flat instead of renting them.
On the other hand HDB flat owners seem to rush to benefit from the rental rates. The number of HDB flats approved for subletting also grew by about 3 per cent to just under 7,000 units. Median rentals for four-room flats are between S$2,000 and S$2,900.
Resale HDB flat transactions increased by about 19% from 5,900 cases in 1st Quarter 2012 to 7,000 cases in 2nd Quarter 2012:
"More buyers are flocking to the resale flat market, with 7,000 units sold in the second quarter of this year as prices rose to a record high, while the Cash-Over-Valuation (COVs) demanded by sellers continued to ease."
Said ERA Key Executive Officer Eugene Lim: “With COVs hovering around S$25,000, many home buyers choose a resale flat instead of going for BTOs (BuildTo-Order) that come with a three-year wait.”
Source : Demand for resale flats up
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| HDB Resale flat price index 2012 |
Ultra high rental cost is one of the main reasons people are rushing out to buy resale flats although the prices are so high. A good HDB flats costs around 2,200+ SGD per month now which translates into 26,000 SGD per year bleeding from your pocket per year. This lets people to rush to ownership of the flat instead of renting them.
On the other hand HDB flat owners seem to rush to benefit from the rental rates. The number of HDB flats approved for subletting also grew by about 3 per cent to just under 7,000 units. Median rentals for four-room flats are between S$2,000 and S$2,900.
Mr Lim said: “One thing for sure, expatriates’ pay packages are now a lot less than they were in the past. So a lot of them are now looking for rentals below S$3,000.”
But this threshold will remain for HDB rentals, PropNex CEO Mohamed Ismail said. “The minute it goes beyond S$3,000, people have got alternatives, which is the private property, that comes with facilities, gym, swimming pool. Why do I pay S$3,500 for a HDB? Makes no sense,” he said.Source : Demand for resale flats up
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