Price growth of HDB resale flats slows in December, analysts expect prices to stabilise in 2023

HDB resale flat prices grew at a slower pace of 0.2 per cent in December compared with November’s 0.6 per cent. ST PHOTO: KUA CHEE SIONG

SINGAPORE - Prices of Housing Board resale flats climbed slightly for the 30th straight month in December, with analysts expecting prices to moderate further in 2023 on the back of cooling measures.

HDB resale flat prices grew at a slower pace of 0.2 per cent in December compared with November’s 0.6 per cent, according to flash data from real estate portals 99.co and SRX on Thursday.

Huttons Asia chief executive Mark Yip said the cooling measures, higher interest rates and buyers resisting higher prices were a “triple whammy” for sellers.

“Excluding flats which are newer or have unique attributes, a majority of flats are sold close to the last transacted prices, reflecting a slight shift in bargaining power to buyers,” he said, adding that the price growth in December was the slowest since August 2019.

In 2022, prices were up 9.4 per cent, lower than the price growth of 13.6 per cent in 2021.

The latest property curbs seem to be effective in putting the brakes on the red-hot housing market, said OrangeTee & Tie senior vice-president of research and analytics Christine Sun, noting that the monthly price growth in the last quarter of 2022 was below 1 per cent.

“The growth rate was slower as prices have already hit record highs in many locations, and many buyers are hesitant to pay much higher prices for a new unit,” she added.

“Moving forward, we expect price growth to remain moderate this year in view of the economic uncertainties, cooling measures and rising interest rates,” she said.

But 99 Group head of research Pow Ying Khuan said the median resale price for the whole of 2022 grew to $527,000, climbing 8.7 per cent from $484,820 in 2021.

More HDB resale flats were sold in December, with the number rising by 4.8 per cent to an estimated 2,242 units from 2,140 units in November.

However, compared with December 2021, transactions were down by 7.7 per cent.

ERA Realty Network chief executive Marcus Chu said resale volume increased steadily in the last quarter of 2022 as the gentler rise in prices could have also encouraged more buyers to return to the property market.

“The gradual recovery in the transaction volume in November and December was despite the traditionally slower property market during the year-end school holiday and festive season,” he added.

In 2022, total resale volumes were 8.1 per cent lower than 2021.

Prices of executive units dipped by 0.4 per cent in December, while other flat types continued to climb.

Although prices in non-mature estates increased by 0.3 per cent, those in mature estates remained unchanged.

Slightly more million-dollar flats were transacted in December, with 28 HDB resale flats changing hands for at least $1 million, up from 26 units in November.

The number of million-dollar HDB flats sold comprises 1.2 per cent of the total resale volume in December.

Among the million-dollar flats sold, five were in Bishan, and three each in Bukit Merah, Toa Payoh and the central area.

The most expensive resale flat was a 150 sq m executive maisonette in Toh Yi Drive in Bukit Timah, which sold for $1.3 million.

A record 370 million-dollar flats were transacted in 2022, up 42.9 per cent from 259 such deals in 2021, said One Global Group senior analyst Mohan Sandrasegeran.

“We are expecting the million-dollar trend to continue at a slower pace in 2023 amid the presence of the cooling measures. Home buyers who value bigger space will likely continue to express interest in larger flats such as loft and maisonettes, which are hot spots for million-dollar deals,” he said.

Ms Sun estimates prices to rise between 5 per cent and 8 per cent for the whole of 2023, while Mr Yip expects prices to increase by not more than 5 per cent.

Ms Sun added: “More Build-To-Order (BTO) flats will also be launched this year, which will help to mitigate excessive price surges in the secondary market.”

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