Drop in HDB resale flat prices in Q1 no cause for panic among condo buyers

[SINGAPORE] Recent data released for the first quarter of 2026 showed Housing & Development Board (HDB) resale flat prices fell on a quarterly basis while private home prices rose.

HDB resale flat prices dipped 0.1 per cent in Q1, marking the first decline in nearly seven years since Q2 2019, according to HDB’s data.

Meanwhile, figures released by the Urban Redevelopment Authority (URA) showed private housing prices rose 0.9 per cent quarter on quarter in Q1, faster than the 0.6 per cent increase in the previous quarter.  

Buyers continue to flock to new condo projects – Tengah Garden Residences sold 853 of its 863 units or 99 per cent of its housing inventory as at Apr 26 over its launch weekend.

However, should a potentially softer HDB resale housing market be setting alarm bells ringing among private home buyers?

HDB upgraders

In Singapore, the HDB resale flat market’s performance has a huge bearing on the fortunes of the private housing market.

Given the additional buyer’s stamp duty (ABSD) regime, private home buyers today are largely Singapore citizens and permanent residents buying their first home.

Citizens pay no ABSD, and PRs pay 5 per cent, when buying their first home. For second and subsequent home purchases, hefty ABSD rates apply to citizens and PRs, while non-PR foreigners and entities buying any home are subject to steep rates.

Many local condo buyers are upgrading from HDB flats. Selling an HDB home, which may have been bought at a subsidised price from the HDB, and recycling the sales proceeds to help fund a condo purchase is a well-trodden path.

SEE ALSO

Median resale prices hit S$1 million for 4-room HDB flats in two towns in Q1 despite overall dip

1,224 private homes sold at 2 new launches; Tengah Garden Residences 99% taken up at average S$2,120 psf

Private home prices rise 0.9% in Q1, setting stage for steady 2026

When HDB resale flat prices soften, HDB homeowners may have less buying power for condo purchases. 

Indeed, as condo purchases are aspirational, many owners of HDB flats might put aside such aspirations if they cannot sell their units for a bullish price. 

While buying demand from HDB upgraders is often most prevalent in suburban condos, this segment’s performance affects prime condo demand as buyers are sensitive to the pricing difference between prime and suburban units.

Ultimately, if HDB resale home prices correct substantially over a prolonged period, private home prices will likely decline too.

Between Q2 2013 and Q2 2019, the HDB Resale Price Index fell 12.4 per cent. Over this period, the URA’s price index of private homes slid 2.1 per cent. The private housing prices corrected by a sharper 11.6 per cent between Q3 2013 and Q2 2017, before recovering.

HDB resale market’s strength

Still, it may be premature to see Q1’s dip in HDB resale flat prices as signalling a significant and extended down cycle in HDB resale home prices.

The magnitude of Q1’s price decline is small. Importantly, there are many areas of strength in the HDB resale housing market.

HDB’s Q1 data showed the median resale prices for a four-room flat in Queenstown and Toa Payoh were S$1.04 million and S$1 million, respectively.

In Q1, median resale prices for a five-room flat in Ang Mo Kio, Bukit Merah and Toa Payoh exceeded S$1 million.

Huttons Asia estimated about 412 HDB resale flats transacted for at least S$1 million each in Q1, up 17.4 per cent quarter on quarter. Increasingly, transactions of HDB resale flats at S$1 million or more each occur not just in mature estates but also non-mature ones.

In April, a five-room flat on a high floor at 96A Henderson Road was sold for S$1.73 million, setting a new record price for an HDB flat in Singapore. The block is part of the City Vue @ Henderson HDB development, where higher-floor units enjoy unblocked views towards the Greater Southern Waterfront.

Singapore’s homeownership rate among residents is high. Having a stable housing market matters as much of household wealth comes from an owner-occupied home and banks have substantial housing exposure in their loan books.

Indeed, as global economic growth faces headwinds due to the energy crisis arising from the Iran war, having a resilient housing market is crucial to support domestic consumption and boost business confidence.

Potential condo buyers can draw assurance from the government being committed to ensuring a stable housing market and having the ability as well as resources to help Singapore navigate tough economic conditions. 

HDB upgraders can also take comfort from the continued strength in demand for sought-after HDB resale flats. For one thing, an owner of a four-room HDB Build-To-Order flat in a popular location which is approaching the end of the five-year minimum occupation period should be able to sell their flat for a sizeable profit fairly easily. 

Recent hot condo launches such as those of Tengah Garden Residences as well as River Modern in River Valley and Pinery Residences in Tampines with launch take-up rates of 90 per cent or more might spur some potential condo buyers to rush to buy for fear of missing out. 

In addition, bullish housing land bids at recent state tenders, coupled with a possible spike in construction costs, could exert pressure on potential condo buyers to buy now.

Nonetheless, potential condo buyers should proceed with greater caution. 

While HDB resale flat prices do not appear to be headed for a major correction any time soon, HDB’s continued push to ramp up supply of new flats including in choice locations takes some fizz off the HDB resale market.

Might a possible hike of the income ceiling applicable to buyers of new HDB flats soon dampen demand for resale units?

In addition, higher inflation, due to the energy crisis, could drive home loan rates up.

Crucially, from a policy perspective, a small dip in HDB resale flat and private home prices may be welcomed. Flat or lower home prices can boost affordability.

In perspective, between Q4 2019 and Q1 2026, prices of HDB resale flats and private homes rose 54.7 per cent and 42.1 per cent, respectively, with private non-landed home prices in the Outside Central Region or suburbs up 52.6 per cent.

Given the fierce competition among potential buyers, securing a choice unit at a hot condo launch could be akin to striking the lottery. Nevertheless, temper celebrations upon snaring a new condo home at a lofty price today given the weakening tailwinds in the private housing market.