Nomura: HDB resale prices likely to remain depressed

Singapore Housing and Development Board (HDB), or public housing, flats in Bugis neighborhood slated for demolition; taken September 2018.Singapore Housing and Development Board (HDB), or public housing, flats in Bugis neighborhood slated for demolition; taken September 2018.

Despite tapering supply, Singapore’s Housing Development Board (HDB) apartment resale prices appear likely to “remain depressed for a while,” Nomura said in a note on Monday.

It noted that HDB has launched 15,811 build-to-order housing units for application this year, excluding balance flats, around 10 percent lower than 2017’s 17,584 units and around 41.6 percent fewer than the peak in 2012 of 27,084 units.

“The tapering of new supply of HDB flats is prudent, in our view,” Nomura said, pointing to HDB resale price data which showed prices fell 2.1 percent on-year in October and were down 14.4 percent from the March 2013 peak.

“Considering the 27,120 HDB flats that were completed in 2014 will be exiting their five-year MOP (Minimum Occupation Period) in 2019, we think HDB resale prices are likely to remain depressed for a while,” Nomura said.

But as a positive, Nomura noted that rents for HDB flats were up 0.3 percent on-month in October, but it added that followed a 0.6 percent on-month decline in September.

HDB is the statutory board for Singapore’s public housing system.