Unusual Divergence in Price Trends for Private Homes and HDB Resale Flats in 2018

Debated in Parliament on 11 Feb 2019.

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The Minister acknowledged that divergence between private home and HDB resale price indices occurred, including between Q2 2017 and Q3 2018, driven by euphoric sentiment in the private property market.
He attributed the divergence to unsustainable price increases in private homes, which prompted the introduction of cooling measures in July 2018.
The Minister stated that the government will continue to monitor both markets to ensure stability and sustainability.
He did not directly address whether leasehold decay concerns contributed to the divergence or whether it is a cause for concern if unaddressed.
Both indices are confirmed to track all transactions in their respective markets, with convergence generally expected due to shared underlying factors.

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Assoc Prof Daniel Goh Pei Siong

Assoc Prof Daniel Goh Pei Siong asked the Minister for National Development (a) whether the unusual divergence in price trends for private homes and HDB resale flats in 2018 is caused by concerns regarding leasehold decay and depreciation of ageing HDB flats; and (b) whether the divergence is a cause for concern if it is not arrested.

Lawrence Wong

The Urban Redevelopment Authority's (URA's) Property Price Index (PPI) captures all private housing transactions, including new sales of units sold by developers, resales and sub-sales; the Housing and Development Board's (HDB's) Resale Price Index (RPI) captures all HDB resale flat transactions.

Insofar as there are underlying factors that affect both the public and private property markets, the two indices would tend to move together. But there have been instances of divergence in the PPI and RPI price trends. This has happened in the past, and more recently between the second quarter of 2017 and the third quarter of 2018. The recent divergence was largely due to euphoric sentiments in the private property market. This resulted in a sharp increase in private property prices over a very short duration. This was not sustainable as prices were increasing well ahead of fundamentals. Hence, the Government had moved to introduce the last round of cooling measures in July last year.

The Government will continue to monitor both the public and private property markets and ensure they are stable and sustainable.

Summary written by AI (learn more)

The Minister acknowledged that divergence between private home and HDB resale price indices occurred, including between Q2 2017 and Q3 2018, driven by euphoric sentiment in the private property market.
He attributed the divergence to unsustainable price increases in private homes, which prompted the introduction of cooling measures in July 2018.
The Minister stated that the government will continue to monitor both markets to ensure stability and sustainability.
He did not directly address whether leasehold decay concerns contributed to the divergence or whether it is a cause for concern if unaddressed.
Both indices are confirmed to track all transactions in their respective markets, with convergence generally expected due to shared underlying factors.

Questions identified by AI (learn more)

Unusual Divergence in Price Trends for Private Homes and HDB Resale Flats in 2018 | PAPERCUTS

Unusual Divergence in Price Trends for Private Homes and HDB Resale Flats in 2018

Debated in Parliament on 11 Feb 2019.

Summary written by AI (learn more)

The Minister acknowledged that divergence between private home and HDB resale price indices occurred, including between Q2 2017 and Q3 2018, driven by euphoric sentiment in the private property market.
He attributed the divergence to unsustainable price increases in private homes, which prompted the introduction of cooling measures in July 2018.
The Minister stated that the government will continue to monitor both markets to ensure stability and sustainability.
He did not directly address whether leasehold decay concerns contributed to the divergence or whether it is a cause for concern if unaddressed.
Both indices are confirmed to track all transactions in their respective markets, with convergence generally expected due to shared underlying factors.

Questions identified by AI (learn more)

Full Transcript

Assoc Prof Daniel Goh Pei Siong

Lawrence Wong

The Government will continue to monitor both the public and private property markets and ensure they are stable and sustainable.

Summary written by AI (learn more)

The Minister acknowledged that divergence between private home and HDB resale price indices occurred, including between Q2 2017 and Q3 2018, driven by euphoric sentiment in the private property market.
He attributed the divergence to unsustainable price increases in private homes, which prompted the introduction of cooling measures in July 2018.
The Minister stated that the government will continue to monitor both markets to ensure stability and sustainability.
He did not directly address whether leasehold decay concerns contributed to the divergence or whether it is a cause for concern if unaddressed.
Both indices are confirmed to track all transactions in their respective markets, with convergence generally expected due to shared underlying factors.

Questions identified by AI (learn more)

Unusual Divergence in Price Trends for Private Homes and HDB Resale Flats in 2018

Summary

Questions Identified

Full Transcript

Assoc Prof Daniel Goh Pei Siong

Lawrence Wong

Summary

Questions Identified

Unusual Divergence in Price Trends for Private Homes and HDB Resale Flats in 2018

Summary

Questions Identified

Full Transcript

Assoc Prof Daniel Goh Pei Siong

Lawrence Wong

Summary

Questions Identified