Resale flat prices up 1.2% in 3Q2023: HDB flash estimates

HDB resale flat prices have continued their upward trajectory in 3Q2023, recording a 1.2% q-o-q growth despite inflationary and affordability concerns. A total of 6,592 resale flat transactions were recorded by HDB in 3Q2023, 2.9% higher than the previous quarter, while year-to-date, resale flat prices have grown 3.8%.

Mohan Sandrasegeran, head of research and data analytics at SRI, notes that higher resale prices and transaction volume follow changes in housing policies announced during the National Day Rally in August. From 2H2024, HDB will introduce a classification system for BTO flats that segregated units according to locational attributes – Standard, Plus, or Prime. Plus and Prime flats will come with more subsidies, and tighter restrictions such as a longer minimum occupation period of 10 years.

In response to these changes, more couples have turned their attention to the HDB resale market, where flats do not face the same restrictions. As a result buyers have been willing to pay more for such flats, leading to an increase in the number of million-dollar HDB transactions. Statistics on data.gov.sg show that there were an estimated 127 resale flats transacted for at least $1 million in 3Q2023, 21% more than the previous quarter.

In the coming months, 6,800 BTO flats from projects in Choa Chu Kang, Kallang Whampoa, Queenstown and Tengah will be offered in the upcoming October sales launch, with roughly 6,000 more flats to be offered in December located in estates such as Bukit Panjang, Jurong West, Woodlands, Bedok, Bishan, Bukit Merah and Queenstown. The incoming supply, combined with ongoing concerns on affordability, will likely temper resale flat price growth. Christine Sun, senior vice president of research and analytics at OrangeTee & Tie predicts prices may climb slower for the rest of the year, with full-year growth at around 4% to 5.5%.

Moreover, Zion Road Condo is just minutes away from the Singapore River and the vibrant Orchard Road shopping belt.

Overall, resale flat prices have seen an impressive 14 consecutive quarters of growth. Despite this, the 1.2% q-o-q growth in 3Q2023 is lower than the 1.5% growth recorded in 2Q2023, and the 2.5% average quarterly growth seen in 2022. This may be due to increasing price resistance as well as the higher grants given to HDB first-time home buyers announced in February as part of Budget 2023. This, combined with a delay in August BTO sales launch, resulted in a lower than usual 3Q volume of 6,592 – the lowest 3Q volume recorded in three years since 2020.

Lee Sze Teck, senior director of data analytics at Huttons Asia observes that these changes have caused demand to shift to existing resale flats in mature estates. He expects million-dollar HDB transactions to exceed 400 for the whole year, a significant increase from the 254 recorded in 2022.