Demand for and prices of public housing flats expected to stay resilient

Source : Channel NewsAsia - 10 Nov 2008

The demand for and prices of public housing flats are expected to remain fairly resilient despite the economic downturn. And market watchers have said this applies to both resale and new units. Close to 9,000 people have visited the Natura Loft showflat since it was launched for sale on October 31.

Its developer Qingjian Realty has already received 500 applications, mostly for four-room units there.But only 480 units are being offered, and these are going for between S$450 and S$570 per square foot.

Sales will close on November 15 and Qingjian expects demand for the new flats to be robust.
Natura Loft is the Housing and Development Board’s fourth condo-style public housing project.
Similarly, interest for public resale flats has not slowed. Property agents said the number of viewings for resale units jumped by 15 per cent in the last six weeks.

Eric Cheng, executive director, HSR Property Consultants, said: “I did an interview with one of the consumers, they were sharing with me that ‘in today’s market, I don’t know how long my job will last, so to safeguard, I would rather go for subsidised (a) house, that is HDB, because how low could HDB go, HDB houses always will have a valuation to support the base value of the units’.”

Market watchers expect prices of resale flats to grow by about 4 per cent in the fourth quarter, slightly slower than the third quarter - which saw a 4.2 per cent growth. ERA real estate agency projects price growth in the HDB resale flats segment to be at between 15 and 17 per cent for the whole of 2008. And it also said it is going to be a buyer’s market for now, due to the challenging economic conditions.

Eugene Lim, associate director, ERA Asia Pacific, said: “Most of the buyers will start their negotiations at below valuation…by and large, most of the deals are pretty realistic nowadays, and cash over valuation very rarely will be more than S$40,000 to S$50,000, most of them will be around the S$30,000 to S$10,000 range.

“The bulk of the deals today are about 80 to 90 per cent close or above cash over valuation, but the days of S$100,000 or S$120,000 cash over valuation…are over.”

Market players said the outlook for Singapore’s property sector may be hazy in the short term, but the prospects still look bright beyond 2010. They said that is because Singapore has plans in place that will help to create jobs and boost the economy.