PRICES of resale HDB flats continued to increase in the past three months but National Development Minister Khaw Boon Wan said efforts to ramp up supply of new flats should help stablise prices soon.
The Housing Board's (HDB's) flash estimate of the third-quarter resale price index is 187.1 - or 3.8 per cent higher than the previous quarter.
Mr Khaw, in his latest blog post, said HDB is 'making good progress' in meeting the needs of first-time applicants who are newly-weds.
Last month , for example, HDB put up for sale 8,200 build-to-order (BTO) and sale of balance flats (SBF) - including units in mature estates such as Bukit Merah and Clementi - to cool the demand for resale flats.
The balance flats were wildly popular, with some in mature estates seeing 50 times as many buyers as there were units available, while the BTO exercise registered an average application rate of 1.7 times.
Mr Khaw expects half the 15,500 first-time applicants to get flats.
'This September launch has redressed part of the shortage in public housing. Our efforts in ramping up HDB flat supply will help stabilise the market. We are beginning to see some light at the end of the BTO tunnel,' he wrote.
Experts said the continued buoyancy in resale-flat prices is a sign that homeowners are now more reluctant to put their units up for sale.
ERA Realty key executive officer Eugene Lim said property owners in general have become more cautious about selling their homes and getting another, after the Government lowered the loan-to-value limit to 60 per cent for those with existing property loans.
He added that cash-over-valuations (COVs) continue to boost resale-flat prices. COVs are cash premiums paid above the official value for resale flats.
Industry experts estimated that the COV was between $35,000 and $37,000 in the last quarter.
Mr Lim said the market may continue in this fashion unless there are policy changes that can increase the supply of resale flats for sale.
PropNex chief Mohamed Ismail predicts that resale-flat prices will have climbed by as much as 11 per cent by the end of the year.
'In spite of this, we are expecting prices to stabilise with the introduction of more new BTO and SBF flats,' he said.
Mr Nicholas Mak, research head of property consultancy SLP International, estimates that resale-flat prices will have increased by up to 14 per cent by year's end, as it will take time for the effect of HDB's large BTO launches to be felt.
Mr Lim noted that new flats may not appeal to all first-time buyers , due to the waiting time of at least 21/2 years for the units to be completed.
Private-property prices, however, are showing signs of moderation. The Urban Redevelopment Authority's private residential property index rose 1.3 per cent in the past three months, compared to 2 per cent in the previous quarter.
Non-landed properties in Outside Central Region areas chalked up the highest price increase of 2.1 per cent.
Those in the Core Central Region and Rest of Central Region had 0.8 per cent and 1.1 per cent rises respectively.
The Core Central Region includes prime areas like Orchard Road and Newton.
The Rest of the Central area includes Outram and Rochor.
PropNex's Mr Ismail said the strong showing by properties outside the central regions is due to recent launches of mass-market condominiums in those areas.