Double digit decline in HDB resale prices from peak - SRX

Headline: Double digit decline in HDB resale prices from peak

• SRX Property releases new sub-indices for HDB mature and non-mature estates. 
• Prices for non-mature HDB estates fall faster than mature HDB estates.

* Non-mature estates refers to Bukit Batok, Bukit Panjang, Chao Chu Kang, Hougang, Jurong East, Jurong West, Punggol, Sembawang, Sengkang, Woodlands and Yishun.

December 2014 HDB Resale Market Observations:

1. HDB resale continued to fall in December. HDB resale prices dropped by 0.4% in December compared to November 2014.  The price drop was driven by HDB 4 and 5 Room flats whose resale prices slipped by 0.7%, and 0.3%, respectively. The resale prices for HDB 3 Room flats remained leveled in December, while HDB Executive flats saw a price increase of 1.8%.

According to the SRX Property Price Index for HDB Resale:

• HDB Resale prices in December 2014 hit a 41-month low since Aug 2011;
• Year-on-year, prices have dropped 6.1% from December 2013;
• Prices have declined 10.0% since the peak in April 2013;
• Price change in Nov 2014 has been revised from a 0.8% decrease to a 0.5% decrease;

According to the SRX Property Price Sub-Indices for HDB Resale in Mature and Non-mature Estates:

• The decrease of HDB Resale prices in December was driven by the 0.9% price drop in non-mature estates;
• HDB resale prices increased 0.2% in mature estates in December;
• Prices in mature estates have declined 7.4% since the peak in Jan 2013;
• Prices in non-mature estates have declined 12.4% since the peak in Feb 2013;

 

2. Resale volume slipped. According to HDB resale data compiled by SRX Property, 1,295 HDB resale flats were sold in December, a 4.1% decrease from 1,350 transacted units in November.

• Year-on-year, resale volume increased by 28.0% compared with 1,012 units resold in December 2013;
• Resale volume is down 64.5% compared to its peak of 3,649 units in May 2010.

3. Overall median Transaction Over X-Value (T-O-X) stayed negative. According to SRX Property, HDB prices continue to face downward pressure and negative market sentiment in December 2014.  The median T-O-X for HDB measures whether people are overpaying or underpaying the SRX Property X-Value estimated market value.

• Overall Median T-O-X was NEGATIVE $4,000 in December 2014;
• Median T-O-X for HDB 3, 4, 5 - Room and Executive flats were all negative in the range of negative $1,000 to negative $7,000.

4. Queenstown posted the highest median T-O-X. For HDB towns having more than 10 resale transactions with T-O-X in December 2014, Queenstown reported the highest median TOX of $3,000, followed by $1,500 in Bukit Merah and Jurong East.

This means that majority of the buyers in these towns has purchased units above the computer-generated market value.

5. Among relatively active towns, Ang Mo Kio posted the most Negative median T-O-X. Among HDB towns having more than 10 resale transactions with T-O-X in December 2014, the lowest median T-O-X were in Ang Mo Kio, Bukit Panjang, and Choa Chu Kang, at NEGATIVE $ 19,500, NEGATIVE $14,000, and NEGATIVE $11,000, respectively. 

This means that majority of the buyers in these towns has purchased units below the computer generated market value.

Source: SRX (8 Jan 2015)