HDB flats in Bukit Batok
An MRT train travelling along the track among blocks of housing flats in Bukit Batok Central. Photo: The Straits Times

The Housing Development Board (HDB) resale market remained stable in the second quarter of 2016 with resale prices unchanged from the first quarter.

The HDB's latest public housing data was released on Friday (July 22) and experts said the market is continuing to consolidate.

Prices have moved only marginally up and down in the past three quarters, noted PropNex Realty chief executive officer Mohamed Ismail Gafoor.

ERA's key executive officer Eugene Lim said: "For the first half of 2015, there has been a 1.5 per cent decrease in prices, a definite improvement. "Moving forth, we can continue to expect stability in prices."

He added that prices are unlikely to rise far, as loan caps continue to restrict buyers' purchasing power.

Resale transactions increased by 31.2 per cent, from 4,449 cases in the first three months of 2016 to 5,838 cases in second quarter of the year.

PropNex Realty's Mr Gafoor noted that with prices consolidating, transactions will pick up. He said: "Buyers who have remained on the sideline should have by now, understood that prices will not fall very much more below this level."

ERA's Mr Lim expects buying demand to remain "resilient". He attributes the rise in transactions to buyers being increasingly attracted to the resale market because they are no longer fearful of having to pay "unrealistic cash premiums". He added: "With housing grants available for eligible buyers, the affordability of resale flats is further enhanced."

SLP International Property Consultants' executive director Nicholas Mak believes that the rise in resale transactions is only "seasonal". He said that HDB resale transactions increased in the second quarter in the 15 out of the past 16 years.

He observed the increase in resale transactions could have also been contributed by the completion of more private and public housing projects this year. "Some of the HDB upgraders who bought these new homes are compelled to sell their HDB flats in order to take possession and finance their new homes," added Mr Mak.

The number of applications approved for subletting of HDB flats increased by 5.2per cent, from 11,239 cases in the first quarter of 2016 to 11,824 cases in the second quarter.

A total of 52,171 HDB flats were sublet, up from 51,052 units over the first quarter.

R'ST Research director Ong Kah Seng expects the total number of flats sublet to increase for the rest of 2016.

"The increase in subletting approvals in 2016 is expected to be more prominent in four-room and five-room flats," he adds.

"Most HDB upgraders, who bought condominiums from developers intend to own a four-room or five-room flat.There is increase in completed suburban condominiums from 2014, so more HDB upgraders who own four-room and five-room flats are expected to put their flat up for subletting, once they move into the completed condominium."

This article was first published in The Straits Times.