Would Resale HDB prices ever drop?

[Choon]

Would Resale HDB prices ever drop?

Would like to tap on the wisdom and experience of valuebuddies - would Resale HDB prices ever drop?

I am thinking:

• HDB resale prices have gapped up strongly since 2020.
  
• Interest rates are rising now. 
  
• If one buys a resale HDB now, would he be entering at the peak?
  

[weijian]

hi Choon,

You can refer to the historical RPI found at HDB.
https://www.hdb.gov.sg/residential/selli...statistics

- There is a chart from 1994 to 2022. Of course the numbers are for averages and mileage varies across room type and town.
- There are 3 noticeable declines - 1997, 2000 and 2013. 1997 and 2000 correspond to AFC97 and dotcom crash and so I reckon it would be safe to assume these were the causes. As for 2013, It was probably Khaw Boon Wan's work after the PAP historic loss of a GRC to the WP.

So based on the historical trend, the answer to your question "would Resale HDB prices ever drop" would be YES.

[LionFlyer]

So based on the historical trend, the answer to your question "would Resale HDB prices ever drop" would be YES.

A fall in price implies a fall in demand. Does the fall in demand indicate some of these demand is "artificial" instead of a real need of housing?

Therefore, in today's context, are high prices a function of real demand ("person really needs a house to stay") or demand + speculation (investment property)?

[brattzz]

It has always been Supply Vs Demand.....

MND Lee say by 2025, majority of covid-delayed BTOs will come on-line, so resale prices will normalized. = so supply increase, yes, prices decrease,

Demand? = depends on our population growth and intake as well, 10 millions people?

so monitor both numbers lah...

[weijian]

A wanna-be economist like me would think that these measures may not be really useful - First, it is highly suspected that higher subsidies just leads to bigger buying power and from economics 101, it just feeds to higher prices. Next, the observation that HDB price increases are accelerating again right after the 15month wait to downgrade from private since Oct2022, is tempting to suggest that resale HDB buyers are largely cash-rich and any LTV reduction doesn't matter in the face of the private housing market boom. End of the day, this is a result of asset-rich-cash-poor situation faced by a majority of Sporeans.

But in the greater scheme of things and on aggregate, rising asset prices is a better problem to have, than deflating asset prices.

Government tightens HDB loan limits to tame resale market, extends more support to lower- to middle-income first-time buyers

The loan-to-value (LTV) ratio for HDB loans will be lowered from 80 per cent to 75 per cent, in line with those granted by financial institutions. The revised LTV limit will apply to completed resale applications received by HDB on or after Aug 20, and to BTO applications from the October 2024 exercise onwards.

At the same time, the HDB will extend more aid to first-time buyers in the form of bigger Enhanced CPF Housing Grants. From their current limit of S$80,000, the EHG grants will be bumped up to S$120,000 for first time families. First-time singles will be able to access up to S$60,000 in grants, from S$40,000 previously.

https://www.businesstimes.com.sg/propert...dle-income

[Duskerdawn]

This question is a little too generic and hard to respond to...

HDB like all properties are location specific. Hence, the price movements are different in each area depending on many factors (e.g. amenities, schools, accessibility - roads/mrt,etc.)

Noting that clusters of zoning typically depict the general location segmented properties. An interest example was during COVID period when property in central areas fell while property in outskirts rose as people could start WFH and value of prime units fell.

However, I do agree generally it's a question of supply and demand.
Of which we need to look at the affordability of Singaporeans in general (i.e. income levels).
Besides the points above mentioned, I also noted many new units have longer MOPs which results in less available units for sale.