Growth in HDB resale prices slows slightly, up 2.4% in Q3: flash estimates
HOUSING Board (HDB) resale prices rose 2.4 per cent in the third quarter of 2022, making it the 10th straight month of quarterly growth, according to HDB flash estimates released on Monday (Oct 3).
However, the growth in the resale price index (RPI), which stands at 167.8 for the quarter, has slowed slightly compared with the 2.8 per cent growth recorded in Q2 2022. It remains lower than the 2.9 per cent quarter-on-quarter growth posted in Q3 2021.
Year on year, resale prices are up 11.4 per cent. Meanwhile, overall prices have climbed by 7.8 per cent in the first nine months of 2022.
OrangeTee & Tie senior vice-president of research and analytics Christine Sun said the slower price growth indicates that the housing sector has already started to feel the effects of rising interest rates and inflation.
“Price resistance may have set in as the cash-over-valuation (COV) seems to have declined in recent months,” she added.
The RPI gives information on the general price movements in the resale public housing market. HDB will release the full figures on Oct 28, 2022.
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Citing ground intel, Huttons Asia senior research director Lee Sze Teck noted that “quite a number” of HDB flats were purchased by private property owners with full cash in 2022.
“Some private property owners are even willing to pay higher amounts of COV to secure the flat hence pushing up the prices of flats,” he added.
Lee expects HDB resale prices to moderate in Q4 in the wake of cooling measures as private property owners will now need to sell off their private property and wait 15 months before they can buy an HDB resale flat.
PropNex Realty head of research and content Wong Siew Ying does not expect HDB resale prices to decline significantly. Instead, the cooling measures will ensure a more sustainable pace of price growth.
“We anticipate that there may be a period of impasse where would-be buyers are waiting for prices to fall while sellers look to hold on to their asking price,” Wong said, adding that this may play out and cause resale volume to moderate slightly perhaps in the next two to three months, before the market adjusts and finds an equilibrium.
In its announcement, HDB said it plans to launch up to 23,000 new flats in 2023. In November 2022, it will offer around 9,500 Build-to-Order (BTO) flats in towns or estates such as Bukit Batok, Kallang Whampoa, Queenstown, Tengah and Yishun.
Later in February 2023, it will offer about 2,900 to 3,900 BTO flats in towns or estates such as Kallang Whampoa, Queenstown and Tengah, subject to review as more project details get firmed up closer to the launch date.
Lee said the largest ever BTO launch in November 2022 – which has a good mix of mature and non-mature estates – may draw some demand away from the resale market. He estimates prices will moderate further to 1 per cent or 2 per cent in Q4 2022, resulting in a full-year price gain of not more than 10 per cent.
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