HDB BTO price up 115% vs resale price index up 40%?

March 4, 2016

Big thank you to ES

My favourite insider ES sent me some data on HDB prices in 1996.

1996 Toa Payoh 4-room $223,400?

The  Average Selling Prices of New Flats in Mature Estates for the 3rd Quarter 1996 – Toa Payoh – 4-room was $223,400.

2016 Toa Payoh 4-room $480,500?

The average price for 4-room in the latest BTO launch in February 2016 in Toa Payoh  is $480,500 ($440,000 + $521,000 divided by 2).

115% increase in price?

This is an increase of about 115 per cent ($480,500 divided by $223,400) from the 3rd Quarter 1996 to December 2015.

40% increase in resale price index?

During this similar period – the HDB Resale Price Index increased by about 40 per cent from 96.4 (3rd Quarter 1996) to 134.8 (4th Quarter 2015).

115% price increase vs 40% index increase?

Why is it that the average price increased by a whopping 115 per cent against the index increase of only 40 per cent?

BTO prices delinked from resale prices?

So, whether it is HDB BTO prices are linked or now already delinked to resale prices (as we have been repeatedly told in recent years) – does this make any sense to you?

Leong Sze Hian

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About the Author

Leong
Leong Sze Hian has served as the president of 4 professional bodies, honorary consul of 2 countries, an alumnus of Harvard University, authored 4 books, quoted over 1500 times in the media , has been a radio talkshow host, a newspaper daily columnist, Wharton Fellow, SEACeM Fellow, columnist for theonlinecitizen and Malaysiakini, executive producer of Ilo Ilo (40 international awards), Hotel Mumbai (associate producer), invited to speak more than 200 times in about 40 countries, CIFA advisory board member, founding advisor to the Financial Planning Associations of 2 countries. He has 3 Masters, 2 Bachelors degrees and 13 professional  qualifications.