Every year, the Housing Board provides a number of flats in order to meet the demands of homebuyers and give them the diversity they need. But, this year, the HDB decided to reduce the number of released BTO flats from 17,000 to 16,000. The 1,000 reduction was taken after it was noticed that the resale sector of the property market is catching up. This particular section of the market was in decline for quite a while, but, apparently, things are stabilizing, including the prices of resale homes.
Starting with the last half of 2016, this year is the first time when it was noticed an increase in the prices of resale apartments. This news came together with the HDB’s announcement to reduce their share of available BTO flats. This is not something new, as the HDB adjusts its offer according to how the market is evolving. According to the HDB board, the number of flats they release will be gradually decreased throughout the year, as the resale market will slowly start picking up the pace. Just how much things moved in the resale sector? As numbers show, there was a 0.1% increase in the prices of resale flats in the second quarter of 2018, in comparison with the first quarter of the year. But, even so, the prices are still lower than they were in the same period of 2017, more precisely 1.5% lower.
Those that keep an eye on the property market in Singapore say that the increase may be triggered by the fact that flat prices in the resale sector already hit the bottom. Thus, as an effect to this, they are starting to bounce back. Let us not forget that there was a drop in prices, a 0.8% decrease, which fueled the decline even more, in the first quarter of 2018. In comparison with the other previous quarters, the decrease was significant. But, things are looking to improve this year and the forecasts are more than positive. Christine Sun, the head of consultancy and research at OrangeTee & Tie, said that prices are expected to slightly increase starting with the second half of the year. She also said that this increase may be due to the rather numerous en-bloc sales and the general positivity when it comes to making purchases found in the private homes sector.
Of course, the fact that the number of available BTO flats will drop may also stimulate price growth for resale private properties, according to Nicholas Mak, the executive director of the ZACD Group. He also added that the consistent supply of new flats is responsible for the price drop in resale flats, as homebuyers prefer new residences if possible. But, considering that the supply for new flats will decrease, the prices in the resale sector are expected to reach a stable value and even record increases. Not everybody is that positive, as they expect, in the best case scenario, for the prices to stabilize, adopting a reserved attitude when making forecasts about price increases. According to specialists, resale flats will continue to be an attractive option for those that want to live in a preferred area or would like to get a home as soon as possible.
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