HDB resale price growth slows, even as number of million-dollar transactions hit record high

Price resistance has set in for HDB resale flats, with prices increasing at a slower pace in 3Q2023. According to Orange Tee & Tie, this comes even as million-dollar transactions reached a record 128 units in the same quarter. The overall q-o-q growth of 1.2% was the smallest seen in the last 14 quarters.

Four-room flats saw the strongest growth with an increase of 1.8%, while single-room and two-room flats also recorded growth from 2.3% to 2.8% and five-room from 23.4% to 22.9%. 10 towns reported a decline in prices, the largest being 3.6% in Geylang, followed by 3.4% in the Central Area, 2% in Bukit Batok and 1.8% in Sembawang.

Despite the decrease in prices, HDB resale transaction volumes rose 2.9% q-o-q to 6,592 units. This could be due to more grants being given to first-timers purchasing HDB resale flats, as well as the delay in the August Build-To-Order (BTO) sales launch, which provided more competition for the resale market.

Million-dollar resale flat transactions hit a new record in 3Q2023 with 128 units sold for at least $1 million, surpassing the previous quarterly record of 111 in 3Q2022. OrangeTee & Tie believes that 2023 will likely smash the 2022’s record of 369 units, as 336 million-dollar flats have already been sold in the first nine months of this year.

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Sengkang had the highest volume of transactions at 504 units, followed by Punggol (499 units), Woodlands (497 units), Yishun (454 units), and Jurong West (439 units). Four towns, Sengkang, Choa Chu Kang, Jurong West and Sembawang have yet to log a million-dollar flat transaction, though Sengkang could be the next to record one, having seen 10 units sold for at least $900,000.

OrangeTee & Tie predicts resale price growth of 4% to 5.5% and a slight decrease in volume to 26,000-27,000 units in 2023. This is significantly lower than the 12.7% growth and 27,896 transactions recorded in 2021, for which affordability could be a factor. The majority of HDB loan packages offered by local banks are above 3%, and consumers might not qualify for HDB’s 2.6% loans. In addition, more demand may be diverted to the BTO market as more flats become available.