HOUSING and Development Board (HDB) resale prices climbed 0.9 per cent in the first quarter of 2023, compared to the 2.3 per cent growth of the previous quarter.

According to HDB flash estimates released on Monday (Apr 3), it was the smallest quarterly increase since Q2 2020, when prices rose by 0.3 per cent.

HDB resale volume in Q1 (as at Mar 30) stands at 6,880 cases, 1 per cent higher than the same period last year, which saw 6,810 cases.

ERA’s key executive officer Eugene Lim said more HDB buyers are exercising restraint when asked to increase their bid after their initial offer to purchase the flat was turned down by the seller.

He said: “This is because a higher purchase price could well mean paying higher cash over valuation. Also, with the loan-to-value limit for a loan from HDB lowered to 80 per cent, buyers with insufficient CPF (Central Provident Fund) funds for the 20 per cent would have to fork out more cash.”

He noted that floating rate bank loans are at an interest rate of over 4 per cent for buyers who are not eligible for a HDB loan. 

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On Monday, HDB also announced that it will launch 5,400 Build-To-Order (BTO) flats in May. The flats will be located in estates such as Bedok, Kallang Whampoa, Serangoon and Tengah. 

In the August BTO launch, HDB will offer between 5,200 and 6,200 flats in estates such as Bukit Merah, Choa Chu Kang, Kallang Whampoa, Queenstown and Tengah.

HDB said these numbers are subject to review as more project details will be firmed up closer to the launch dates. 

It will continue to monitor the housing demand and is prepared to launch up to a total of 100,000 flats from 2021 to 2025. 

Huttons senior research director Lee Sze Teck said that the flats available in the May and August BTO launches may have a shorter waiting time and attract some buyers away from the resale market. 

He said: “The higher interest rate in 2023 may also deter buyers from the resale market and see them applying for a BTO flat.”

Based on data downloaded on Mar 31, there is an increase in the number of HDB towns with quarterly price declines, said Lee. 

In Q2 2022, there were three HDB towns which saw a decline in quarterly prices. This increased to seven HDB towns in Q3 2022, 10 in Q4 2022 and 12 in Q1 2023. 

The HDB towns with two quarters of price declines were Bukit Panjang, Kallang/Whampoa and Tampines.

However, based on caveats downloaded on Mar 31, there were 101 million-dollar flat transactions in Q1, despite the overall trend of HDB resale prices flattening. 

Lee said: “The cooling measures on private property owners did not appear to have reduced the number of million-dollar flat transactions.”

He noted how the number of estimated million-dollar flat transactions in Q1 2023 is 9.8 per cent higher than Q4 2022, and 21.6 per cent higher than a year ago.