HDB resale flat prices up 1.3% q-o-q in 3Q2023, slower previous quarter

Resale flat prices in Singapore rose marginally by 1.3% q-o-q in 3Q2023, according to data released by Housing Development Board (HDB). This confirms a 14th consecutive quarterly increase, though the growth rate is lower than the 1.5% q-o-q increase registered in 2Q2023. Year-to-date, resale flat prices have risen 3.8%, significantly lower than the 8% and 9.1% growth seen over the same period in the past two years.

The moderation in resale flat price growth comes despite an increase in transacted volume in 3Q2023. 6,695 flats changed hands, up 2.8% q-o-q, though 11.3% lower y-o-y. This is the lowest third quarter resale volume recorded since 2020. The change in proportion of sales of flats by type has also shifted, with four-room flats being the most popular at 43.8%.

The HDB attributes the lower growth rate and increased cooling measures implemented by the government to promote a stable and sustainable property market. This includes a wait-out period of 15 months before private property owners are allowed to purchase a non-subsidized HDB resale flat, as well as the lowering of the Loan-to-Value limit for HDB housing loans from 90% to 85%, and further to 80%.

Uncertainties in the property market due to economic headwinds, multiple delays of Build-to-Order (BTO) launches and potential changes to housing policies have led to some buyers sitting on the fence until there is more clarity.

Demand is higher for resale flats in mature estates, with Sengkang topping the list of HDB towns in terms of transactions, with over 500 flats changing hands in 3Q2023. This is due to the upcoming change in HDB’s housing classification system, which will impose tighter restrictions on resale BTO units such as a longer minimum occupation period and limitations for renting out the property.

This has caused an increase in million-dollar resale flat transactions in 3Q2023, with 128 flats sold for at least $1 million, 21.9% higher compared to the previous quarter.

In anticipation of the upcoming BTO launch in December of 6,000 flats in various estates, demand for resale flats may be diverted to the BTO market. This, combined with the increase in Additional Buyer’s Stamp Duty raising the upgrading hurdle, could lead to fewer resale flat transactions in the coming quarters.

OrangeTee & Tie’s research & analytics senior vice president, Christine Sun, anticipates full-year resale flat price growth to clock in between 4% to 5.5%, lower than the 10.4% growth recorded in 2022 and the 12.7% growth seen in 2021.

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HDB is on track to launch a total of up to 23,000 flats in 2023, with the hope of creating a stable and sustainable property market in Singapore.