HDB resale volumes fall to three-year low in Q2; prices rise 1.4%
HOUSING and Development Board (HDB) resale flat volumes declined 4.6 per cent year on year to 6,409 flats in the second quarter of 2023.
This was the lowest in the last three years since Q3 2020, according to flash estimates released on Monday (Jul 3).
Resale prices rose 1.4 per cent from the previous quarter. Although this was higher than the 1 per cent growth recorded in Q1, the Q2 price increase was still lower than the 2022 average quarterly growth of 2.5 per cent.
Property analysts observed that gains in resale prices were partly fuelled by buyers seeking larger homes, with four-room and five-room flats being the most popular.
Median prices of five-room and four-room flats rose by 1.9 per cent and 1.5 per cent, respectively, while prices of three-room flats dipped 0.5 per cent, noted Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.
HDB upgraders priced out of the private market may have also bought bigger resale flats, she added.
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Echoing the sentiment, ERA Realty key executive officer Eugene Lim noted that higher borrowing costs and the latest round of cooling measures – including the payment of higher upfront Additional Buyer’s Stamp Duty – may have made some HDB homeowners reconsider their plans to upgrade to a private home.
Higher grants, higher demand
Demand for HDB resale homes may have also risen after grants for first-timers were raised, noted analysts from OrangeTee and Huttons.
“While the grants gave buyers a boost in their housing budget, there is still a price mismatch between sellers and buyers, leading to lower transaction volume,” said Huttons senior director of research Lee Sze Teck.
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He noted that some buyers were lured to the Build-To-Order (BTO) market, as the HDB increased the supply of flats with shorter waiting time.
Prices stabilise
Noting the multiple rounds of cooling measures implemented since December 2021, HDB said it is “seeing some moderation” in the rate of increase in resale HDB prices.
The latest flash estimates could also indicate that the slower price increase in Q1 2023 was “not a blip”, and resale prices are reaching more sustainable growth path following two years of strong price growth, observed Wong Siew Ying, PropNex Realty’s head of research and content.
Wong noted that this is the second consecutive quarter where the HDB resale price index grew below the 2 per cent mark. In the nine previous quarters, prices climbed by more than 2 per cent to 3 per cent per quarter.
More BTO flats to come
In the same report, HDB said that it would offer, in August, around 6,700 BTO flats in Choa Chu Kang, Kallang Whampoa, Queenstown and Tengah. This is higher than the previously announced range of between 5,200 and 6,200 units.
HDB will offer around 6,300 flats in the November BTO launch for flats located in Bedok, Bishan, Bukit Merah, Bukit Panjang, Jurong West, Queenstown and Woodlands.
This brings the total number of flats to be launched in the second half of 2023 to 13,000 units, which is 31 per cent higher than the 9,923 units launched in the first half.
Analysts believe some housing demand could be diverted to the BTO market, as HDB ramps up the supply of new homes. Some of these new homes may also have shorter waiting times, noted OrangeTee and Huttons.
“This increase in both BTO and resale flat supply may moderate prices in HDB resale flats to not more than 5 per cent in 2023,” Huttons’ Lee said.
Buyers are also now less pressured to offer high bids due to increased flat supply, said PropertyGuru Singapore country manager Tan Tee Khoon.
Dr Tan expects around 16,000 flats to reach their minimum occupation period this year. With more executive condominiums and private homes being completed, more HDB upgraders may also put their homes on the resale market, he added.
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