HDB Q3 resale prices rise 1.2%; quarterly volume up 2.9%, but down from a year ago
HOUSING and Development Board (HDB) resale prices rose 1.2 per cent in the third quarter, with the Resale Price Index reaching 178.4, according to HDB’s flash estimate on Monday (Oct 2).
However, this was lower than the 1.5 per cent growth in Q2 and 2022’s average quarterly growth of 2.5 per cent.
“The price resistance could have set in amid inflationary and affordability concerns,” said OrangeTee & Tie’s senior vice-president of research and analytics Christine Sun. Also weighing on buyers are interest rates that have stayed higher for a longer time, added Sun.
Sun noted that year-to-date, prices increased by 3.8 per cent in the first nine months, less than the 8 per cent rise seen over the first three quarters of 2022 and 9.1 per cent in 2021.
Mohan Sandrasegeran, Singapore Realtors Inc’s (SRI’s) head of research and data analytics, said a combination of factors may have contributed to the quarterly rise in HDB resale prices. He noted the delay of the August Build-To-Order (BTO) exercise to early October, combined with the announcement of HDB estate reclassification, likely prompted a redirection of interest towards the HDB resale segment.
The price growth was largely driven by 4-room flats, with average prices rising 1.8 per cent from S$579,740 in Q2 to S$590,450 in Q3. This was followed by a 1.3 per cent price increase in executive flats and 0.8 per cent rise in 3-room flats over the same period, said Propnex Realty’s head of research and content Wong Siew Ying.
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ERA Realty’s chief executive officer Marcus Chu said that there were 126 million-dollar HDB flats that changed hands in Q3, versus 105 deals in Q2.
Close to 43 per cent of these transactions were from mature estates like Bukit Merah, the Central Area, Kallang/Whampoa and Queenstown, Chu added.
Resale flat volume of HDB flats increased 2.9 per cent on a quarterly basis to 6,592 flats, but fell year on year in Q3.
Resale volume in Q3 was higher than Q2’s 6,409 units, but lower than the 7,298 flats sold in the same period a year ago. This was also the lowest Q3 volume since 2020, HDB said.
SRI’s Sandrasegeran said the delay in the August BTO exercise, coupled with the delay of the November BTO exercise to December, would likely prompt couples in urgent need of housing to pivot their focus towards the HDB resale market, as it represents a more immediate and accessible option.
HDB announced it will offer around 6,800 BTO flats – located in Choa Chu Kang, Kallang Whampoa, Queenstown and Tengah – in early October.
In December, it will offer about 6,000 BTO flats located in Bukit Panjang, Jurong West, Woodlands, Bedok, Bishan, Bukit Merah and Queenstown.
HDB said the launch of new BTO flats remain on track, with 23,000 units in 2023, and a total of 100,000 flats from 2021 to 2025.
Huttons Asia’s senior director of data analytics Lee Sze Teck said, “While there may be applicants who are put off by the penalties for non-selection of flats, there are applicants who want to secure a BTO flat in mature estates before the new classification kicks in from H2 2024.” Lee, however, said the interplay of these factors may not see a significant impact on the resale market.
Huttons Asia expects HDB resale flat transactions to be in the range of 24,000 to 26,000 in 2023.
With more BTO supply and affordability remaining a key concern among home buyers, OrangeTee’s Sun expects HDB resale prices to rise moderately for the rest of the year.
“The resale market may not see a repeat of the rapid price increases witnessed during the pandemic,” she said. “Prices may climb slower for the rest of the year, with the full-year growth at around 4 per cent to 5.5 per cent.”
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