HDB resale buzz set to continue

HDB resale buzz set to continue

But increasing buyer resistance and and an expected surge in supply may take away some sheen, says EUGENE LIM

HDB resales prices accelerated their climb in the second half of 2007 for a full-year gain of 17.5 per cent, on the back of a strong economy, brighter job prospects and supply-demand factors.
The HDB Resale Price Index (RPI) rose 6.6 per cent in the third quarter and 5.7 per cent in Q4, after 1.3 per cent and 3 per cent increases for the first and second quarters.

The 17.5 per cent jump in resale prices last year was dramatic compared to just 2 per cent in 2006. But it was still much less than the 34.3 per cent surge seen in 1996. At 121.7 points, the RPI at Q4 2007 is just 11 per cent shy of the peak of 136.9 points recorded in Q4 1996. As the economy improved, more buyers were upgrading to larger flats. The government's target for an eventual population of 6.5 million has seen increasing numbers of permanent residents (PRs) in Singapore. The latter typically buy their HDB homes from the resale market as they do not qualify to buy new flats directly from the HDB.

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