HDB resale prices pick up in March with 24% more flats sold

SINGAPORE – Prices of Housing Board resale flats crept up in March after staying flat in February.

Resale prices rose marginally by 0.7 per cent in mature estates and 0.5 per cent in non-mature estates, with prices of both five-room and executive flats recording the highest increase of 1.3 per cent, according to flash data released by real estate portals 99.co and SRX on Thursday.

While prices for four-room resale flats increased by 0.5 per cent, resale prices of three-room flats dipped by 0.3 per cent. Overall, prices increased by 8.3 per cent compared with March 2022.

Property analysts attributed the increment to higher demand following the return of home buyers after the Chinese New Year period and the shorter month of February.

Although it appears that the HDB resale price index rebounded in March, veteran property analyst Nicholas Mak noted that the overall month-on-month price increase at 0.5 per cent was lower than the average monthly price growth of 0.7 per cent in the 12-month period from March 2022 to February 2023.

Mr Pow Ying Khuan, head of research at 99 Group, said potential private property seekers who were on the fence about securing a home loan for a private property (or who failed their stress tests) might have sought HDB resale flats as a viable alternative – particularly five-room and executive flats – which mainly contributed to the month-on-month resale price increase in March.

Meanwhile, 23.7 per cent more HDB resale flats changed hands in March, with 2,287 units transacted compared with 1,849 units in February.

OrangeTee & Tie senior vice-president of research and analytics Christine Sun said: “Sales volume rebounded in March after the Government announced that more Central Provident Fund Housing Grants will be given to first-timers buying resale flats.”

PropNex Realty head of research and content Wong Siew Ying noted that the

increase in CPF Housing Grants,

announced during the Singapore Budget in mid-February, could help to improve affordability and lower the monthly mortgage payable for buyers.

“Some of our agents earlier indicated that they have seen an increase in inquiries following the Budget announcement. In addition, the dip in resale volume in February could also be due to the HDB’s Build-To-Order (BTO) exercise in February, which may have drawn some buyers away from the resale market then,” she said.

Ms Wong noted that flats in non-mature estates accounted for about 58 per cent of the monthly resale volume in March, with Punggol leading the sales with 188 units transacted, followed by 176 units transacted in Woodlands.

Based on transaction data, newer flats with at least 94 years of remaining lease made up about 15 per cent of March’s sales, and many of them were located in the non-mature towns of Bukit Batok, Punggol and Woodlands, she added.

Mr Mak expects HDB resale prices to reach the peak and plateau in 2023 as more buyers could be drawn to apply for BTO flats, instead of buying resale flats in the coming months.

With the construction industry having largely recovered from the pandemic and supply chain disruption, and the Government’s plan to launch more BTO flats, buyers would have more choices, he said.

“Furthermore, HDB will be implementing new rules that will penalise BTO applicants who refuse to select a flat when invited to do so. This new rule will discourage applicants who are not serious about acquiring a flat from participating in the BTO exercise,” he added.

Mr Eugene Lim, key executive officer of ERA Realty Network, said that come May, HDB will offer about 5,400 BTO flats in Bedok, Kallang/Whampoa, Serangoon and Tengah. In August, it will offer between 5,200 and 6,200 flats in Bukit Merah, Choa Chu Kang, Kallang/Whampoa, Queenstown and Tengah.

The number of resale flats that went for at least $1 million rose to 39 units from 24 units in February, noted 99.co and SRX.

In terms of flat type, nine were four-room flats, 19 were five-room flats and 11 units were executive flats, noted Ms Wong.

These million-dollar units made up 1.7 per cent of the total resale volumes in March – with Toa Payoh recording eight such transactions. The most expensive resale flat sold in March was a five-room unit at The Pinnacle @ Duxton for $1.4 million.

With 103 million-dollar flats changing hands in the first three months of 2023, Ms Wong expects interest in such flats, “which tend to have excellent attributes, be in popular locations and are spacious”, to remain healthy as they offer a good value proposition for buyers compared with private homes in the same locations, which are much pricier.

At this pace, the number of million-dollar resale flats will surpass the record of 369 units sold in 2022, she added.

Ms Sun said that the nine million-dollar four-room flats sold in March were a monthly record for such transactions.

“Since private home owners aged 55 and above are exempted from serving the 15-month wait-out period if they purchase four-room or smaller resale flats, more four-room resale flats may be sold above a million dollars after the policy change,” she added.

Mr Mak said that buyers with a higher budget who were still priced out of the private housing market would turn to acquiring HDB flats with attractive attributes. Hence, they would be fuelling the demand for million-dollar flats, he added.