HDB resale price index remains unchanged for 1Q2020

By Valerie Kor
/ EdgeProp Singapore |
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SINGAPORE (EDGEPROP) - Although HDB resale prices tracked two consecutive quarterly rises previously, it held steady at 0% in 1Q2020.
This goes to show that Covid-19 may be reversing the upward trend caused by policy changes implemented in 2019, such as the introduction of the Enhanced Housing Grant and changes in the use of CPF funds for the purchase of ageing HDB flats.
Nicholas Mak, head of research and consultancy at ERA Realty, says: “After contracting for six years since the mid-2013, the HDB resale price index started to recover in the second half of 2019. In the first quarter of 2020, the HDB resale price index flash estimate remained unchanged after a 0.4% q-o-q expansion in 4Q2019. On a y-o-y basis, HDB resale prices still grew 0.4% in 1Q2020.”
HDB Resale Price Index (%)
Price Index (%)
2018 Overall
2019 Overall
Q12020 (Flash)
Source: PropNex Research, HDB
PropNex Realty CEO Ismail Gafoor also believes that buyers will remain cautious and expects HDB resale prices to remain muted for the rest of the year, with negligible price changes.
Governmental help is a major mitigating factor that will prevent overall property prices from falling further. Aside from the $48.4 billion Supplementary Budget package announced by Deputy Prime Minister and Finance Minister Heng Swee Keat on March 26, which included generous cash payouts and wage offset for certain industries, the Monetary Authority of Singapore (MAS) also announced that they will help individuals and SMEs meet their loan and insurance commitments.
Particularly, the Supplementary Budget measures will lend a helping hand to lower-income individuals who, more often than not, stay in HDBs.
For instance, the cash payouts to adult Singaporeans will be tripled from between $100 and $300 to between $300 and $900. Those who will receive the maximum $900 must earn $28,000 or less in the financial year of 2019.
Late payment charges on HDB mortgage arrears will also be suspended for three months to help those who are struggling with their mortgage payments. Loan instalments can also be deferred for up to six months.
This will help property owners hold on to their properties and tide over the crisis.
OrangeTee & Tie’s head of research and consultancy, Christine Sun, says: “The property market will likely keep afloat as long as unemployment remains low and people are able to service their mortgages.”
JLL’s senior director of research & consultancy, Ong Teck Hui, concurs: “The Job Support Scheme announced in the Supplementary Budget could help towards pay cuts and retrenchments. The Financial Industry Support Measures announced by the MAS would enable homeowners to defer mortgage payments till the end of 2020. This will assist those who are in financial difficulties and minimise the risk of distress sales.”
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