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SG 2014 likely quiet for HDB resale market

Property Here - Thursday, December 26, 2013

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The HDB resale market is expected to slow down next year on the back of the government’s measures on permanent residents (PRs), according to analysts quoted in a media report. 

Newly-minted PRs now have to wait three years before they can purchase a resale flat. There was no such requirement previous to when this regulation came into effect on 27 August. 

The housing board revealed that PR households purchased an average of 323 units per month during the first eight months of the year. However, this fell to an average of 176 units per month since the introduction of the new ruling. 

“Based on these preliminary figures from the HDB, the drop in demand from PRs will reduce the (overall) demand for resale flats by about 10 percent in 2014,” said Nicholas Mak, Research Head at SLP International Property Consultants. 

Moreover, first-time buyers can easily purchase new flats currently, while the government is expected to raise the quota of new flats for second-timers. 

This means that fewer buyers are expected to turn to the resale market.

While next year’s figure will likely be similar to 2013 – which saw “one of the lowest in years” with estimates at around 17,200 to 18,500 compared to more than 24,000 to 37,000 in annual resale volumes over the last five years – activity is expected to pick up in the second half of the year as buyers get drawn back to the market by lower prices.

The real estate agency is also “quietly optimistic that resale HDB volumes will pick up in 2014” as HDB slows down the launch of Build-to-Order (BTO) flats.

As such, resale volumes will likely be “a shade better than this year” at over 20,000 but less than the 25,000 or so recorded in 2011 and 2012.