Prices of resale flats continue rising

Resale volume drops slightly

The Housing Development Board (HDB) gave its flash estimate for the Q1 2010 Resale Price Index (RPI) at 154.9 today. This represents an increase of 2.7% for Q1 2010, compared to the 3.9% increase in Q4 2009.

Yet, resale volume has trended downwards. The estimated number of resale transactions for the past quarter is about 8,500. This is about 5% lower compared to Q4 2009 which registered 8,926 transactions.

The median Cash-Over Valuation (COV) amount for Q1 2010 has stabilised at $25,000, an increase of $1,000 over Q4 2009. In contrast, the median COV doubled from $12,000 in Q3 2009 to $24,000 in Q4 2009.

PropNex CEO Mohamed Ismail thinks the price index will go up further. “As long as COV levels, fuelled by strong demand, remain high, the RPI will continue to go up. The latest figure would be in line with our forecast of an overall 5 – 8% growth in the RPI for 2010,” he said.

He also pointed out that the first quarter is traditionally the quietest quarter for property sales and that a dip in sales volume was to be expected. In fact, Ismail feels that the dip was relatively small and was another reflection of the public housing demand.


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