HDB resale prices climb at slower pace of 2.1% in Q4: flash estimates

HOUSING and Development Board (HDB) resale prices climbed 2.1 per cent in Q4 2022, making this the 11th straight consecutive quarterly growth, according to HDB flash estimates released on Tuesday (Jan 3). 

The growth in resale prices came at a slower rate than that of the previous quarter, which saw a growth of 2.6 per cent. It remains under the 3.4 per cent quarter-on-quarter growth posted in Q4 2021, and is the lowest quarterly growth since Q3 2020, when prices climbed 1.5 per cent.

On a year-on-year basis, prices rose by 10.3 per cent. This is slightly slower than the 12.7 per cent increase in the whole of 2021. 

Huttons senior research director Lee Sze Teck noted that the slower price growth indicates that more HDB homeowners are willing to negotiate prices, particularly after the latest round of property cooling measures to rein in demand and ensure prudent borrowing. 

“Higher interest rates and buyers’ resistance were also headwinds for the HDB resale market in the fourth quarter of 2022,” he said. 

Christine Sun, senior vice president of research and analytics at OrangeTee & Tie, highlighted that another reason for Q4’s slower growth is that there were fewer sales of large flats and flats in mature estates, which tend to fetch higher price tags. 

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The proportion of five-room flats, executive flats and multi-generational units had dipped to 30.1 per cent or 1,876 units in Q4, from 33 per cent or 2,392 units in Q3. 

Similarly, the proportion of flats in mature estates dipped to 39.8 per cent or 2,479 units in the fourth quarter, from 41.7 per cent or 3,024 units in the previous quarter. 

One Global Group senior analyst of research and content creation Mohan Sandrasegeran added that there were also fewer million-dollar-flat transactions in Q4, with 91 units sold compared to the previous quarter’s 111 units.

The dip, although marginal, shows that the cooling measures implemented in late September are “beginning to have the desired impact that they were designed to,” said Sandrasegeran.

Meanwhile, resale volume in Q4 2022 (as at Dec 29), stands at 6,474 cases, down 15.8 per cent from the same period last year, which saw 7,692 cases. 

Total resale volume between Jan 1 and Dec 29 is 27,773, down 9.7 per cent from the corresponding period last year, which saw 30,769 cases. 

Analysts predict that prices will moderate even as supply remains tight in 2023. 

For instance, PropertyGuru head of real estate intelligence Lee Nai Jia expects about 16,000 flats in towns and estates such as Bukit Batok, Yishun, Buangkok and Sembawang to reach their minimum occupation period in 2023. In comparison, over 30,000 flats had reached their minimum occupation period in 2022. 

“Consequently, these estates may see great resale flat price growth in the coming year,” he said. 

Still, Lee believes the momentum of price growth will slow and the resale market will stabilise in the new year – especially as more built-to-order projects complete and construction delays continue to alleviate. 

In February, HDB will offer about 4,400 BTO flats spread across Jurong West, Kallang Whampoa, Queenstown and Tengah. Later in May, it will offer around 3,800 to 4,8000 flats in towns and estates in Bedok, Kallang Whampoa, Queenstown, Serangoon and Tengah. 

In total, HDB said it intends to launch up to 23,000 new flats in 2023 and is prepared to launch up to 1000,000 flats in total between 2021 and 2025, if necessary. 

These BTO launches will, in turn, draw demand from the resale market, said ERA Realty head of research and consultancy Nicholas Mak. 

“Hence, about 24,000 to 28,000 HDB resale flats could change hands in 2023, slightly lower than the estimated resale volume in 2022,” he said. 

Mak added that prices of HDB resale flats are therefore expected to grow at a slower pace of about 5 to 9 per cent for the whole of 2023. 

HDB will release full figures for the quarter on Jan 27.