HDB resale price growth slows, even as number of million-dollar transactions hit record high

Million-dollar flat transactions rose to record heights in 3Q2023, with 128 units being sold for at least $1 million – surpassing the previous quarterly record of 111 units in 3Q2022. This comes despite the fact that overall price resistance has set into the HDB resale market, with resale flat prices growing at a slower pace in the same quarter.

Christine Sun, senior vice president of research & analytics at OrangeTee & Tie, commented that the slower growth in resale flat prices is attributed to inflationary concerns and home buyers’ affordability being hit due to interest rates that have stayed elevated for longer than anticipated.

For the overall market, prices increased by just 1.2% q-o-q, charting a 14th consecutive quarterly growth – this is a slower growth compared to the 1.5% q-o-q increase in 2Q2023 and the 2.5% average quarterly growth clocked in 2022. In terms of year-to-date figure, prices increased by 3.8% in the first three quarters of 2023 – significantly lower than the 8% growth over the first nine months of 2022.

Four-room HDB resale flats saw the biggest growth in prices, rising 1.8% q-o-q – from $579,740 in 2Q2023 to $589,992 in the third quarter. Despite the fall in prices, HDB resale transaction volumes rose 2.9% q-o-q in 3Q2023 to reach 6,592 units.

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This increase is attributed to the delay in the August Build-To-Order (BTO) sales launch, which diverted more Singaporeans to the resale market, as well as more grants being given to first-timers purchasing HDB resale flats.

OrangeTee & Tie’s Sun also puts forth that this year might break the full year record of 369 units achieved in 2022. In fact, the 336 million-dollar flats sold in the first nine months of this year suggests that this could be the case.

It also highlights that average resale prices declined in 10 towns in the 3rd quarter, more than the six towns recorded in the prior quarter. Sengkang saw the highest number of volume at 504 units, while Yishun and Jurong West followed with 454 and 439 units respectively.

Going forward, OrangeTee & Tie believes affordability will continue to be influenced by the interest rate environment. Coupled with the fact that more flats may be diverted to the BTO market, the firm expects HDB resale prices to grow at a more measured pace of between 4 to 5.5% in 2023. As for volumes, the firm predicts resale flat transactions to dip slightly to around 26,000 to 27,000 units this year.