As the markets quieten down for the year end, one may wonder what the new year will bring. More new private homes? Or perhaps a revival of the resale HDB flat market which has seen less action especially in the last quarter of 2013?
For the first half of 2014 at least, sales transaction of resale HDB flats are not expected to soar. In fact, it might be the second year in a row, following 2013, with the least number of sales in the last five years. Usually the average number of transactions a year come up to between 24,000 and 37,000, but this year, the numbers may fall below the 20,000 mark.
One of the main factors behind the dip could be the restrictions placed up PRs (permanent residents) buying HDB flats. Following their receipt of the PR status, they are now required to wait 3 years before being able to purchase a public housing unit from the resale market. But this may in turn drive up the rental demand, thus once again this may turn the market on its heels and redirect interest into the rental and private property market. Are more investing in private properties in order to ensure quick returns through rental yields? And could this be the trend for 2014?
As more new BTO flats are made available to first- and even second-time applicants, the lure of resale HDB flats may weaken even further. Location and space could the resale market’s plus points however. And as HDB holds back on its building schemes and reduces the number of launches next year, the buying crowd may once again consider resale flats more seriously. And industry players are more positive about H2 of 2014 as the low selling prices and COV (cash-over-valuation) attract buyers back into the market.