Fewer BTO flats this year as resale market shows positive signs
Housing Board to trim this year's number of flats to about 16,000
The Housing Board is tapering off its supply of flats amid signs that the public resale market is finally starting to stabilise after a prolonged period of decline.
Resale flat prices increased slightly for the first time since the third quarter of 2016 while the HDB said yesterday that it will cut this year's supply of Build-To-Order (BTO) flats from 17,000 to about 16,000.
It adjusts its supply from time to time, depending on market conditions.
HDB's flash estimates showed that resale flat prices were 0.1 per cent higher in the second quarter of this year than in the first quarter, even as prices remained 1.5 per cent off where they were in the same period a year ago.
Industry observers said the increase in resale prices could mean they have already bottomed out and are starting to turn around.
The prices fell by 0.8 per cent in the first quarter of this year, compared with the previous three months.
OrangeTee & Tie head of research and consultancy Christine Sun said prices might even rise slightly in the second half, thanks to interest from "displaced en bloc owners and spill-over positive buying sentiment from the private residential market".
The reduction in BTO flats may also contribute to a slight increase in resale prices, said ZACD Group executive director Nicholas Mak, noting the recent decline in resale prices has been attributed partially to the strong supply of new flats.
Others were more cautious.
ERA Realty key executive officer Eugene Lim expects prices to remain flat, or increase by no more than 1.5 per cent for the year.
He also noted that different segments of the resale market would be affected differently.
Older resale flats with depreciating leases may continue to see dampened demand and falling prices.
Meanwhile "newer flats with exceptional attributes continue to command a premium", he said.
Meanwhile, private home prices rose 3.4 per cent in the second quarter from the previous three months, keeping pace with the 3.9 per cent increase in the first quarter, according to flash estimates from the Urban Redevelopment Authority yesterday.
This was led by a 3.8 per cent rise in landed home prices, followed by a 3.3 per cent increase for non-landed homes.
So far this year, HDB has offered 11,373 flats, comprising 7,634 BTO flats and 3,739 balance flats. Next month, it will offer another 4,300 BTO flats in Punggol and Yishun.