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SG Resale flat supply to rise, but prices still high

Property Here - Tuesday, May 28, 2013

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By Romesh Navaratnarajah:

The supply of resale HDB flats is expected to increase in the next three years as more owners are willing to sell once they get the keys to their new Build-to-Order (BTO) flats.

This will benefit first-time buyers who prefer resale flats to new homes, but analysts predict that prices will still be high, reported My Paper.

National Development Minister Khaw Boon Wan recently stated in Parliament that 5,600 HDB flat owners will be required to sell their existing flats once they get their new BTO units next year. In 2015 and 2016, another 5,600 and 3,300 owners will have to sell their existing flats. 

Christine Li, Head of Research and Consultancy at OrangeTee, believes that the larger supply will create a balance in the resale market. Cash premiums included in a HDB flat’s valuation “could become more manageable” in areas with most sellers, she noted.

“This could benefit first-time flat buyers who prefer immediate occupation or (buying units in) mature estates, where BTO flats are still limited.”

In terms of prices, those for resale flats will remain high as they are partly driven by private property upgraders who retain and rent out their flats, said Nicholas Mak, Executive Director of Research and Consultancy at SLP International.

As these upgraders keep their units, they deprive another family the chance of ownership while “escalating the prices of resale flats”. 

Romesh Navaratnarajah, Senior Editor at PropertyGuru, wrote this story. To contact him about this or other stories email