SINGAPORE - Prices of Housing Board resale flats edged up 0.3 per cent in July, even as more units changed hands, a sign that home prices are rising at a slower pace.

HDB resale prices increased by less than 1 per cent for the third consecutive month, as buyers’ price resistance appeared to set in, flash data released by real estate portals 99.co and SRX on Thursday showed.

The growth rate of HDB resale flat prices in the first seven months of this year has slowed, compared with the same period in 2021 and 2022, a sign that prices have moderated, said OrangeTee & Tie senior vice-president of research and analytics Christine Sun.

From January to July 2023, resale prices rose 4.2 per cent, slower than the 6 per cent increase in 2022 and 8.2 per cent in 2021 recorded over the same months, she noted.

“HDB resale prices have reached record highs in many locations, and some buyers may be priced out. So there is now limited upside potential for prices to trend significantly higher,” said Ms Sun.

Some home seekers could also have turned to the Build-To-Order (BTO) market where HDB has been launching more new flats, she added.

HDB resale flat prices had been on a 31-month rally before a marginal 0.1 per cent dip in February. Analysts cautioned at the time that it was too early for this to be seen as an indication of a cooling market. Prices have risen for five straight months since then.

A report by PropertyGuru released on Monday noted that sellers’ asking prices for HDB resale flats slowed in the second quarter of 2023 to a 0.6 per cent increase, down from a 1.6 per cent rise in the first quarter of the year.

Asking prices for HDB resale homes are showing “signs of reaching a plateau” as buyers are less pressured to meet high asking prices since they have more options, said PropertyGuru’s report, which aggregated more than 600,000 listings on their property portal.

For July, 99.co and SRX data showed HDB resale flats in mature estates recording a slight price decrease of 0.4 per cent, while those in non-mature estates increased by 0.4 per cent.

Huttons Asia chief executive Mark Yip said it could be an indication of an increased proportion of buyers being priced out of flats in mature estates. These buyers could then have turned to flats in non-mature estates, thus propping up demand, he said.

HDB resale flats in non-mature estates made up more than 60 per cent of overall sales in the past four months, noted Mr Yip.

Sales activity bounced back from the seasonal lull in June, with an estimated 2,056 units changing hands in July, up 10.7 per cent from the 1,858 units the month before.

Analysts said the rebound in transaction activity is not surprising as it comes after the June school holidays and coincides with the rush to close deals before the Hungry Ghost month that runs from Aug 16 to Sept 14. Some consider it inauspicious to make big-ticket purchases during this period.

However, this year could buck the trend of a seasonal lull in HDB resale transactions during the Hungry Ghost Festival as the August BTO sales exercise has been pushed back to end-September or early October.

Mr Luqman Hakim, chief data and analytics officer at 99.co, expects a slight uptick in sales volume in the coming months due to the “unexpected” rescheduling of the BTO launch, which could potentially have a knock-on effect on the next Sales of Balance Flats exercise.

This could prompt potential buyers who were hoping to secure flats with shorter waiting times to turn to the HDB resale market, he said.

In July, 32 HDB flats changed hands for at least $1 million each, down from 34 units in June. Of the 32 units, 12 were executive flats, 12 were five-room flats and eight were four-room units.

The 32 million-dollar units made up 1.6 per cent of the total resale volume for July.

PropNex Realty head of research and content Wong Siew Ying noted that the number of million-dollar flats has consistently tipped over the 30-unit mark each month for the most part of 2023. She expects the figure to stay elevated as high private-home prices continue to channel buying interest to such HDB resale flats.

The most expensive HDB resale flat sold in July was a five-room Design, Build and Sell Scheme unit at the Peak @ Toa Payoh that sold for $1.38 million.