People to buy HDB resale flats instead due to new curbs

Experts revealed that the government’s surprise implementation of new cooling measures on the private residential market last week is expected to prompt some people to buy HDB resale flats instead, but the number is unlikely to be significant, reported Channel NewsAsia.

“It is only beneficial to people who probably wanted to upgrade from HDB to a private property, but given the new measures and the more negative outlook, they decide to upgrade to HDB instead,” said International Property Advisor’s Chief Executive Ku Swee Yong.

“In terms of real numbers, I would guess it would be several hundred (units) a year,” he estimated, adding that the marginal gain is unlikely to be sufficient enough to push HDB resale prices up.

The authorities decided to impose new property curbs after statistics showed that prices of private residences increased by 9.1 percent year-on-year in Q2 2018, with analysts forecasting that prices would soon rebound to their peak in 2013.

ZACD Group’s executive director Nicholas Mak thinks that the HDB market will likely remain at “status quo” despite the new property cooling measures as most first-time home buyers typically prefer to purchase Build-To-Order (BTO) units or resale HDB flats due to their affordability.

“In the first place, they are already going to buy an HDB, so the cooling measures have no impact. It is those living in HDB flats and thinking of buying a condominium, these people will be affected.”

“There will be some turning from private to resale properties, but this number is so little that it’s not going to make a difference.”

Chris International’s Director Chris Koh concurs that the private property curbs is unlikely to have a large impact on the HDB resale market as people who sell an HDB flat usually purchase another one.

Nevertheless, many could wait on the sidelines and watch the impact of the new cooling measures on private home prices.

“Historically, the second and third quarter are good quarters So if the second quarter can register good stablisation, it will attract buyers to come back into the market. Many want to let prices slide further, but when they realise that prices are not sliding anymore, then they will come back into the market,” he added.

 

Senior Content Producer, Christopher Chitty, edited this story. 

This post was originally posted on Property Guru Property Market News Section