But in the first three months of this year, public housing upgraders were notably out of the brisk action that saw an estimated 4,000 private residential units snapped up - more than double the 1,860 units sold in the preceding quarter, despite property market curbs introduced last month.
Steeply rising prices and the burden of servicing hefty mortgage loans are among the reasons that have held back HDB dwellers from chasing their private-housing aspirations, according to analysts.
HDB upgraders made up just 33.7 per cent of the private home buyers in the first quarter, a sharp drop from the 63.7 per cent in the same quarter a year ago, according to a report by CB Richard Ellis.
Mr G Rajan, a PropNex agent, told MediaCorp that the price gap between a public flat and a private condominium was so wide that buyers think twice about switching.
As bank loans now are allowed to cover only 80 per cent of the sale price, down from 90 per cent, this means home buyers will need to fork out more cash as well.
Another factor for the weaker participation of HDB upgraders: Most launches in the first three months were for up-market properties in prime districts, compared to the largely mass market projects that dominated launches in the first quarter of last year.
Indeed, this quarter's private home sales are supported by an influx of foreign buyers, who make up 23.5 per cent of new home buyers, said the CBRE report.
As for prices, they are expected to be close to peak numbers, when the Urban Redevelopment Authority releases its residential property price index this week, said Mr Desmond Sim, associate director of research and consultancy at Jones Lang LaSalle.
Could more market-cooling initiatives be on the cards? Some think so.
Ms Chua Chor Hoon, head of DTZ South-east Asia Research, said: "If the buying fever and price increase continue unabated or intensify, more government measures are likely to be introduced."
Mr Colin Tan, head of research and consultancy at Chesterton Suntec International, said: "I don't see why prices should come down on their own without any government intervention as there is more money to spend than apartments to sell."
Liquidity, coupled with growing market confidence, continues to fuel demand as investors dive into the market hoping to gain from price increases, said Ngee Ann Polytechnic real estate lecturer Nicholas Mak.
Some expect the market to soften and HDB upgraders to return in the third quarter.
CBRE thinks demand for new homes in the next quarter will reach 3,000 and developers will snap up offerings under the Government Land Sales programme to replenish landbanks. As such, home prices are likely to rise gradually.
DTZ Research expects prices to increase "moderately" by per cent this year, noting that landed home prices this quarter have surpassed 2008 peak levels.
But at the same time, leasehold homes outside the prime districts have seen least price growth since they have passed the peak, and there is "more resistance" to higher prices in the mass market.
Meanwhile, the resale private home market has not enjoyed the same level of activity. In fact, there has been a notable decrease, said Mr Vinod Nair, chief executive officer of SmartLoans.
"There is a 10- to 15-per-cent price gap between what sellers want to sell at, and buyers to buy at," said Mr Nair.
- TODAY, 31 March 2010
