HDB flats in Singapore. TODAY file photo

SINGAPORE — Property cooling measures continued to work their way through the public housing market, as resale prices registered another quarter of decline to end 2014 with the largest annual fall in 13 years.

Latest flash estimates by the Housing and Development Board (HDB) released today (Jan 2) showed that resale flat prices were down 1.4 per cent in the last three months of 2014, the six consecutive quarter of decline and milder than the 1.7 per cent fall recorded in the third quarter of last year.

This brings the dip for the whole of 2014 to 6.1 per cent, the steepest decline since 2001 when the resale price index fell 8.2 per cent, noted Mr Ismail Gafoor, chief executive of PropNex Realty.

“The falling resale prices are due to the potent combination of the government’s measures to stabilise the public housing market, such a, reducing the Mortgage Servicing Ratio (MSR) cap of 30 per cent and the maximum loan term of 25 years for HDB mortgage loans, three-year wait for new permanent residents before they can buy resale HDB flats, and allowing singles to buy two-room BTO flats in non-mature estates,” Mr Ismail said.

With the Government showing no intentions to scale back or revise the cooling measures, analysts expect HDB resale prices to continue to slide in 2015. However, lower Build-to-Order (BTO) supply planned for this year could help to direct some demand to the resale market.

Mr Eugene Lim, key executive officer of ERA, said: “Resale volume has taken a beating in 2014 as the Government’s demand and supply side measures continue to bite. ERA is expecting the overall resale HDB transaction volume for 2014 to be in the region of 17,000 units. Historically, this will be lowest level for resale transaction volume.”

“We are hopeful that as HDB scales down the Build-To-Order (BTO) programme… coupled with the continued stabilization of resale HDB prices, we may see some rebound in the number of resale transactions for 2015,” he added.

HDB said it will launch 16,900 BTO flats through four exercises this year, down from this year’s six exercises with a total of 22,400 units. The first exercise of 2015 to be held in February will offer 3,940 new flats in Bukit Batok, Geylang and Hougang.

The flash estimates released today also marks the first time the HDB resale price index is computed using the Stratifies Hedonic Regression method to better reflect price changes over time by taking into account more attributes such as age of flat, which floor it is on and proximity to amenities.

HDB has also re-scaled previous price indexes to the new base period of first quarter of 2009 from the previously used fourth quarter of 1998. However, the quarterly percentage changes remain unchanged.

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