Last year, HDB resale prices rose 10.4%, slowing from a 12.7% price growth in 2021

, ,

Read more: In 2023, CDL will be ranked as the leading real estate company for sustainability

In 2023, CDL will be ranked as the leading real estate company for sustainability

Based on the most recent quarterly HDB price figures that were released on Jan 27 prices for flat resales rose by 2.3% q-o-q in 4Q2022. This brings the total increase up to 10.4% compared to the 12.7% price gain recorded in 2021.

It also marks the fourth consecutive increase in HDB price resales since the beginning of 2019and the this quarter’s price increase was the slowest pace of growth since 3Q2020.

The total amount of HDB transactions for resales fell to 6,597 transactions in the 4th quarter of 2022 lower than the 7,546 transactions recorded in the prior quarter. The amount of transactions recorded during 4Q2022 were 16.9% lower than in 2021.

The reason for the slowdown is an ebb in market activity because of the seasonal slowdown in the final quarter of each year in addition to the new property cooling measures that were introduced in September of last year, claims Wong Siew Ying, PropNex Realty’s chief of research and content.

The same sentiment is shared by Lee Sze Teck, senior director of research at Huttons Asia, who adds that price increases in the HDB markets for resales has slowed slightly since 2H2022 due in part to the resistance from buyers as well as higher interest rates.

“The rising costs of borrowing are affecting the budgets of buyers, as buyers too are shuddering at the idea of having to pay cash above valuation , given that the economic outlook are becoming uncertain in the 2H2022 period.” Lee says. Lee.

Furthermore, the government came into the market by introducing market intervention measures to slow the rise of HDB flat costs last year, in response to fears that the costs of the five and four-room flats were beginning to be beyond the reach of most buyers.

“The rise in the amount of HDB flats that were resold for minimum $1 million in 2022, with the number of units increase from 259 to 370 flats the year before as well as played a significant role in causing concerns about the affordability of housing,” adds Wong.

The most recent property cooling measures that were announced on September 30 are aimed at private property buyers who purchase large-sized HDB flats that are resold. “The effects are felt right away in the real world as a lot of private property owners are unable to get an exemption from HDB and have to end their purchases,” says Lee.

The most recent resales statistics reveal that flats worth a million dollars that were sold dropped from 111 during 3Q2022 to 93 in the 4Q2022. The total flats that sold for at least one Million dollars or greater was responsible of 1.3% of the total sales in FY2022.

Supply boosting

HDB also released more details regarding the build-to-order (BTO) flats to 2023. The following BTO sales exercise scheduled for next month will include 4,400 flats, and include the development of new properties within Jurong West, Kallang Whampoa, Queenstown and Tengah. The June 2023 BTO sales exercise will provide up to 4,800 flats within developments in Bedok, Kallang and Whampoa, Queenstown, Serangoon and Tengah. The statutory board has stated that it will provide up to 23,000 BTO flats this year , and will continue to track the housing market and adjust if it is necessary.

“The announcement from Singapore’s government states that they are determined to increase availability of BTO flats to satisfy the housing requirements of Singaporeans. If you read between the lines this also implies that the government will do everything it can to curb the increasing HDB prices for resales,” claims Nicholas Mak, head of research and consulting of ERA Realty.

But the most significant element that will drive buyers to return to BTO flats is the government’s success in reducing the wait time for developments in the new BTO developments, according to Mak.

The research conducted by Huttons Asia shows that the number of two-room and spacious flats that met their 5-year MOP (minimum occupancy duration) by 2022 stood at 30,199. However, it is expected to decrease by more than 50% this year to 15,364 flats. This will “drastically cut down on the number of “newer” flats that are resold,” says Lee.

This is also a sign this means that HDB renting market likely to be favourable for landlords due to the low rental flats available for rent Mak. Mak.

‘Healthy’ resale performance

The resale efficiency for the HDB market by 2022 is deemed healthy according to Christine Sun, senior vice head of research and analytics of OrangeTee & Tie. The secondary market had a good showing despite prices falling in certain towns that hit record highs and sellers are facing intense competition from the bumper collection of BTO launches, she adds.

Additionally some homeowners were hesitant in putting their houses available for sale in the during the quarter, relying on the ‘wait and see’ method according to Mohan Sandrasegeran senior analyst for content and research for One Global Group.

“It is possible that certain that some (sellers) might have chosen to wait for the market conditions to improve or see the effect of the most recent cooling measures to come into effects or be reviewed prior to placing their homes for auction,” says Sandrasegeran.

He says that more than 100,000 people applied for 23,000 BTO flats which were announced in January. Though the government has announced that it will increase the availability of BTO over the next couple of years, the demand for BTO supply usually outpaces supply, according to Sandrasegeran.

PropNex anticipates HDB prices decrease further in 2018 to the range of% or 8% due to the high-interest rates, resistance to price by buyers property tempering measures as well as a bleak economic outlook. “Meanwhile the there is a demand for HDB flats for resales is anticipated to remain steady through 2023. We estimate that between 27,000 and 28,000 flats will be sold this year, which is similar to 2022.” Wong says. Wong.