SINGAPORE – The HDB resale market showed a notable shift in September, with prices falling for the first time since February and fewer units sold.

Overall Housing Board resale prices fell by 0.6 per cent from August to September, according to flash estimates from property portal SRX and 99.co released on Thursday. Prices dipped 0.9 per cent in non-mature estates and 0.4 per cent in mature estates.

Compared with September 2022, overall resale prices increased by 4.9 per cent.

Meanwhile, resale volume fell by 19.7 per cent, with 1,985 units sold in September, down from 2,473 flats sold in August. On a year-on-year basis, September’s resale volume was 23.3 per cent lower than in the previous period.

October’s Build-To-Order (BTO) launch is one of the key influencing factors behind this discernible shift in the HDB resale landscape, analysts said.

The anticipation of new BTO units, particularly in prime locations, appears to have diverted potential buyers from the resale market, they added.

“Some prospective buyers may have decided to wait for the BTO launch, given the desirable locations offered, including in Kallang/Whampoa and Queenstown,” said PropNex’s head of research and content Wong Siew Ying.

The analysts cited other possible reasons for the slower resale market.

Ms Wong said that “a mismatch in price expectations between sellers and buyers” could have slowed transactions.

Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said the slower market could be due to the impact of the Hungry Ghost Festival from August to mid-September, during which home buyers tend to hold off purchases.

Mr Luqman Hakim, chief data and analytics officer of 99.co, highlighted concerns about high interest rates and inflation, which could have shifted some prospective buyers’ demand away from the resale market amid its increasing prices.

The moderate resale activity has weighed on HDB resale prices, said Ms Wong, who pointed out that the median price at 16 out of 26 estates fell from August to September.

This is “likely contributed partly by the pullback in the number of million-dollar flats sold in September compared with the previous month”, she added.

SRX and 99.co data showed 42 resale flats were transacted for at least $1 million, down from 54 such transactions in August.

September’s figure takes the number of million-dollar resale flats sold to 336 in the first nine months of this year, representing about 1.7 per cent of total HDB resale volumes, noted Ms Wong.

Compared with the same nine-month period in 2022, million-dollar resale flat sales were up by about 21 per cent, from 277 units, she said.

“This (year) looks on track to smash the record of 369 million-dollar resale flats transacted in the whole of 2022,” Ms Wong added.

A closer look across different room types showed that while the resale prices of three-room flats rose by 0.6 per cent, prices fell for four-room units (by 0.9 per cent), five-room units (0.3 per cent) and executive flats (2.1 per cent).

Of the total number of resale units sold in September, 45.5 per cent were four-room flats, 23.1 per cent were five-room ones, 25.6 per cent were three-room ones, and 5.8 per cent were executive units.

Mr Eugene Lim, key executive officer of ERA Singapore, said that even though the changes in median prices across all flat types were marginal, with the overall market median price falling from $560,000 to $555,000, “September was still the month with the second-highest price (in 2023), after August”.

The most expensive flat sold was in Bishan, where an executive unit changed hands at $1.45 million.

The flat was built in the 1990s and has a generous floor area of 172 sq m, which reflects a unit price of $783 per sq ft based on its purchase price, noted Ms Wong.

“Following two years of strong price growth and recent cooling measures, it appears that HDB resale prices are plateauing, as price resistance sets in. While we still expect the resale volume to be relatively steady, the ample supply of new BTO flats in attractive locations and more flats with shorter waiting time could possibly siphon some buyers from the HDB resale market,” said Ms Wong.

This sentiment was echoed by Ms Sun of OrangeTee &Tie, who suggested that while September’s price drop might be a temporary blip, the resale market may face challenges before the year ends.

“Around 13,000 new flats will be put up for sale from two BTO sales launches in October and December. Many BTO flats are well-located, in proximity to an MRT station or surrounded by ample amenities. As a result, we expect more buyers to be diverted from the secondary market. Moreover, the year end will usually experience a seasonal slowdown in sales activities as many buyers and sellers will be on holiday,” said Ms Sun.