RESALE prices of public housing flats climbed for the 10th consecutive quarter in the third quarter of 2022, up 2.6 per cent from the previous quarter, but slightly slower than Q2’s 2.8 per cent rise.

The slower growth seen in Q3 shows the public housing market is starting to feel the effects of rising interest rates and inflationary pressures, said Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics. 

Data from the Housing and Development Board (HDB) on Friday (Oct 28) showed transaction volumes of resale flats growing 10.7 per cent in Q3 to 7,546 units, from 6,819 units in the previous quarter. Year on year, this was a 10.5 per cent dip. 

Resale volume in the January to September period this year totalled 21,299 flats, about 8 per cent lower than in the year-ago period, noted Nicholas Mak, ERA head of research and consultancy.

The 2.6 per cent Q3 rise announced on Friday was slightly higher than the earlier estimated 2.4 per cent released on Oct 3. 

Year on year, HDB resale prices were 11.6 per cent higher in Q3 2022, and have risen 8 per cent in the first nine months of this year.

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Huttons senior director of research Lee Sze Teck said resale prices have soared 27.4 per cent since the “circuit breaker” period during the height of the pandemic in 2020. The third quarter also saw more larger flats sold.

ERA’s research showed that price growth in Q3 was driven by prices of larger flats, said Mak. According to ERA’s calculations, the median price of executive flats, the largest public housing flats, increased 4 per cent to S$780,000 in Q3 from Q2. The median price of three-room flats inched up just 0.5 per cent to S$370,000 in Q3, PropNex research showed; the four-room flat median rose 2 per cent to S$520,000; while that of five-room flats went up 3.3 per cent to S$630,000. 

The tally of million-dollar flat deals in Q3, while a small percentage of the market, continued to creep up. As of the end of Q3, 277 HDB resale flats have been sold for S$1 million or more so far this year, about 7 per cent higher than the total for the whole of 2021. 

Huttons’ Lee pointed to the 111 million-dollar flat transactions in Q3 2022, 35.4 per cent more than the quarter before, with more million-dollar deals surfacing in non-mature estates. A 1,776 sq ft executive maisonette in Bukit Batok was sold for S$1.005 million in July while in September, a 1,603 sq ft 5-room loft unit in Punggol was sold for S$1.198 million with the buyer paying cash over valuation (COV) of almost S$200,000.

HDB noted that the Q3 data reflected the market condition before the recent implementation of cooling measures to promote “sustainable conditions” in the property market. 

Head of research and content at PropNex Realty Wong Siew Ying believes that these “targeted” measures will ease pressure in the resale market, moderating prices. She predicts resale prices will rise by 9 to 10 per cent this year, compared to the 12.7 per cent increase in 2021. 

However, OrangeTee & Tie’s Sun holds that this moderation might be temporary as the market “takes a breather”.

“Past trends indicate that our property market is highly resilient and usually rebounds within six months of a cooling measure,” she said. “Fundamentals such as our strong household balance sheets, tight domestic labour market and sustained income growth will prop up housing demand.” 

As at the end of Q3, there were 56,372 flats rented out, up marginally by 0.6 per cent from Q2. HDB approved 8,192 cases to rent out HDB flats, 12 per cent lower quarter on quarter and 21.4 per cent down on year.

PropNex’s Wong expects renting to continue on the upward trend in following months. Those affected by HDB’s new 15-month waiting period may rent in the interim, while demand will also come from “HDB upgraders who have sold their flats first before purchasing a private home to avoid having to pay the additional buyer’s stamp duty”. 

In November, HDB will offer about 9,500 BTO flats in Bukit Batok, Kallang Whampoa, Queenstown, Tengah and Yishun. Another 2,900 to 3,900 units will be offered in February 2023. In total, HDB said it will launch up to 23,000 BTO flats in 2023 and “is prepared to launch up to 100,000 flats between 2021 and 2025 if needed”.

The November 2022 BTO launch will be the largest ever and will draw demand from the resale market, said Huttons.