HDB resale prices up 1.5% in Q2; fewer flats change hands, volume down 6.7%
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From April to June, 6,514 units changed hands, which was 6.7 per cent lower than the 6,979 homes sold from January to March.
PHOTO: ST FILE
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SINGAPORE - The prices of Housing Board resale flats showed signs of moderation as they rose by 1.5 per cent in the second quarter of 2023 – lower than the average quarterly growth of 2.5 per cent in 2022.
However, it is still higher than the 1 per cent growth reported from January to March 2023, HDB noted in its data release on Friday.
The price moderation occurred after cooling measures were introduced to manage demand and encourage prudent borrowing, and was due to the implementation of a strong pipeline of Build-To-Order (BTO) flats, HDB said.
Cooling measures introduced in September 2022 include a wait-out period of 15 months
Chief research officer of property portal Mogul.sg Nicholas Mak said: “The strong supply of BTO flats pushed out by the Government since 2022 is having its intended effects.
“Homebuyers are gradually drawn from the HDB resale market to the BTO market or to wait for their desired BTO projects to be available for application.”
PropertyGuru Singapore country manager Tan Tee Khoon noted that HDB resale prices will likely moderate further as an influx of about 16,000 flats will complete the mandatory five-year minimum occupation period in 2023 and are expected to enter the market.
This will give buyers more choice and reduce the pressure to match high asking prices.
OrangeTee & Tie senior vice-president of research and analytics Christine Sun noted the highest price increase was for one-room flats, with prices rising 3.6 per cent from a median of $237,000 in the first three months of 2023 to $245,500 for April to June.
She added that this was followed by executive flats, whose prices went up by 2.3 per cent from $800,000 to $818,000 over the same period.
Prices of five-room flats climbed up 1.9 per cent from $638,000 to $650,000, while those of four-room flats increased 1.5 per cent from $537,000 to $545,000.
The median price of flats increased in 18 out of 26 towns for April to June, Ms Sun said.
Geylang registered the biggest price growth of 19.2 per cent, followed by Ang Mo Kio at 8.4 per cent, the central area at 6.8 per cent, and Bukit Panjang at 6.1 per cent.
From April to June, 6,514 units changed hands, which was 6.7 per cent lower than the 6,979 homes sold from January to March, HDB data showed.
PropNex Realty head of research and content Wong Siew Ying said the slower sales could be due to a combination of factors, including a mismatch in price expectations between buyers and sellers, the 15-month wait-out period discouraging home owners from selling their private residential property and buying a resale HDB flat, as well as the ramped-up supply of new BTO flats.
“We heard feedback that a delay in HDB Flat Eligibility (HFE) letter approval could also have contributed somewhat to the slower resale transactions,” said Ms Wong.
In May, the HFE was introduced to streamline the purchase process. Buyers just need to make a single application to obtain the letter informing them if they are eligible to buy a new or resale flat, how much of housing grants they can use and the HDB loan amount they qualify for.
ERA Realty Network’s key executive Eugene Lim said the upcoming BTO launch, where HDB will offer about 6,700 flats in estates including Kallang/Whampoa and Queenstown, would likely divert some of the demand from both first-time and second-time buyers away from the resale market.
The number of approved applications to rent out flats rose by 1.9 per cent, from 9,657 units in January to March
As at the end of June, there were 56,858 flats being rented out.
Ms Sun noted that HDB rental demand increased as some tenants switched from renting private properties to public flats, amid rising rents islandwide.
But rents may face some downward pressure since more flats have been completed, and those who have been renting will move into these premises, said Ms Sun. She added that there will also be more competition from more private homes being completed.
