SINGAPORE — Resale prices of public flats in the city-state declined by 0.9 per cent for the whole of 2018, according to flash estimates by the Housing and Development Board (HDB) released on Wednesday (Jan 2).

Prices fell 0.2 per cent in the fourth quarter of 2018, compared to the previous quarter.

The big picture: This is the sixth straight year of decline since 2012, when prices went up by 6.4 per cent. The drop in resale prices last year was lower than in 2017 (-1.5 per cent) but greater than in 2016 (-0.2 per cent).

Factors that will affect prices in 2019, according to property analysts:

• The supply of HDB resale flats

• Concerns over depleting leases on HDB flats

• Updates on housing policies such as the Voluntary En bloc Redevelopment Scheme and Home Improvement Programme II, which were announced by Prime Minister Lee Hsien Loong at last year’s National Day Rally

• National Development Minister Lawrence Wong announced that the ministry is looking into providing more flexibility for buyers to use their Central Provident Fund (CPF) savings to buy older HDB flats

• Impact of July 2018’s cooling measures on the private residential market

Neither a buyers’ or sellers’ market in 2019?

• Key executive officer of property agency ERA Eugene Lim said the HDB resale market has largely stabilised, as most deals closed without buyers having to pay extra cash over the market valuation of the flat.

  While this is a good thing for buyers, sellers “don’t have to worry about selling below market value”, noted Mr Lim.

  Mr Ismail Gafoor, chief executive officer of property firm Propnex, said the “stalemate” will continue in 2019.

Buyers such as young families or newly married couples who cannot wait for a Build-to-Order (BTO) flat, but who are cash-strapped, can enter the resale without having to pay cash.

Sellers looking to upgrade can plan for their next home without the fear of incurring unexpected losses.

Not all agree. Some analysts say it will be a buyer’s market in 2019

• Ms Christine Sun, head of research and consultancy at property agency OrangeTee said the market in 2019 should tilt towards buyers as there will be a large supply of resale flats

• About 25,000 BTO flats will reach the minimum occupation period of five years this year. Between 2011 and 2013, a bumper crop of more than 25,000 new flats was launched each year

• Over 15,000 BTO flats launched in 2015 and close to 18,000 in 2016 will be completed in 2019, which may affect the HDB resale market, said Mr Lee Sze Teck, head of research at property firm Huttons. “It is unlikely to be the end of the slide for the HDB resale market in 2019,” he said.

• Ms Sun also said the weak sentiment in the private residential market may spill over to the HDB resale market. “There seem to be more HDB sellers who are coming to terms with how the market is performing and prices are becoming more attractive,” she said.

Price projections:

• Mr Lim and Mr Ismail predict at least a 1 per cent increase in HDB resale prices for this year

• Ms Sun and Mr Lee expect prices to remain flat or even decrease by between 1 and 2 per cent

Private residential market: 

• The Urban Redevelopment Authority also released latest flash estimates for private property prices on Wednesday. Prices dropped by 0.1 per cent in the fourth quarter last year, compared with a 0.5 per cent increase in the previous quarter.

  For the whole of 2018, prices went up by 7.9 per cent.