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HDB resale prices dropped from Sept to Oct, private resale prices were flat

Posted by Property Launch Invest on Thursday, 14 November 2013 in Property News

HDB COV prices have been dropping over recent months. COV was $15000 and $12000 in September and October respectively and is predicted by some to fall to $10000 by year's end. HDB prices have dropped 1.6% in October compared with a small 0.2% gain in September which correlates with the rise in the number of resale HDB units in October, a 26.5% increase over September.

Over in the private residential market, resale prices declined only 0.1% from September. The suburban and central areas fell the most at 1.4 and 0.9% respectively vs a slight gain of 0.4% in the city fringes. Mirroring the increase in sales in the HDB market, 13.6% more units (486 units) exchanged hands in the resale market in October compared with September. This however is quite a drop compared to Oct 2012 when 1,435 unts exchanged hands.

Both HDB and private residential markets have seen cooling measures introduced. HDB has capped the mortgate servicing ratio at 30% of the borrower's gross monthly income and reduced the tenure of loans to 25 years for HDB loans and 30 yrs for bank loans. Also, permanent residents are now barred from purchasing flats during the first 3 years after receiving PR status. The large number of new flats in the pipeline may also dampen the HDB resale market. For private residential properties, the total debt servicing ratio (TDSR) limits borrowers total debt obligation to 60% of gross monthly income and there is the additional buyer's stamp duty or ABSD have worked to dampen the market.

For new private properties, many buyers are also staying in the sidelines as they perceive a bear market coming and are waiting for prices to drop. Units that are still moving tend to be the units in the lower quantum range as demonstrated by the success of the InFlora recently. Property developers have started to respond to market conditions by reducing prices.

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PROPERTY LAUNCHES & INVESTMENTS

Property Launches & Investments

HDB resale prices dropped from Sept to Oct, private resale prices were flat

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