HDB resale flat prices up 1.3% q-o-q in 3Q2023, slower previous quarter

Demand for HDB resale flats still strong in 3Q2023 despite price moderation, new data reveals. Resale flat prices rose 1.3% quarter-on-quarter according to figures released by the Housing Development Board (HDB), marking the 14th consecutive quarterly increase. This reflects the government’s cooling measures, implemented to promote a stable and sustainable property market, with the rate of growth lower than in the past few years.

In 3Q2023, 6,695 flats changed hands, a 2.8% quarter-on-quarter increase. This is 11.3% lower than the same period in 2022, indicating some uncertainty in the market amid economic headwinds, repeated delays to Build-to-Order (BTO) launches, and possible changes to housing policies.

Christine Sun, Senior Vice President of Research & Analytics at OrangeTee & Tie notes that the proportion of sales by flat type has also changed over the last year, with demand for five-room flats seeing a decline from 25.4% in 3Q2022 to 22.9% in 3Q2023. Likewise, the proportion of executive flats sold decreased from 7.3% in 3Q2022 to 5.8% in 3Q2023.

In contrast, demand for four-room flats grew, with the proportion of sales for this flat type increasing from 41.7% in 3Q2022 to 43.8% in 3Q2023. Eugene Lim, Key Executive Officer at ERA Singapore, attributes this to the relative affordability of four-room flats compared to bigger flats, as well as the fact that seniors above 55 years of age do not need to wait 15 months when downgrading from a private property.

Meanwhile, rental volume in the HDB market rose 0.1% q-o-q in 3Q2023 to 9,852 approved applications, 20.3% higher y-o-y. As at the end of 3Q2023, there were 57,797 HDB flats rented out, an increase of 1.7% over the previous quarter.

Sengkang had the most resale flat transactions, followed by Punggol, Woodlands, Yishun and Jurong West. With the upcoming change in HDB’s housing classification system, buyers are more willing to pay a premium for flats in mature estates as they won’t face restrictions on resale.

This is evident from the number of million-dollar flat transactions in 3Q2023, which reached 128, a 21.9% quarter-on-quarter increase. The Housing Development Board is on track to launch up to 23,000 flats this year, and some demand is expected to be diverted from the resale market to the BTO market.

OrangeTee & Tie’s Christine Sun states that interplay of these effects may see resale volume dip slightly to between 26,000 to 27,000 units in 2023, with full-year resale flat price growth clocking in between 4% to 5.5%. This rate is lower than the 10.4% and 12.7% growth seen in 2022 and 2021 respectively.

The Tengah Town EC is conveniently located near the station, which will add to its appeal. It will also be well connected to other parts of the city by public transport. With its modern, eco-friendly features, the development will provide an excellent living experience for residents.

Despite the easing of resale flat prices and lower transaction volume, demand for HDB flats in mature estates still remains strong. Buyers are often keen to secure these units without the restrictions imposed for Plus and Prime flats, while the number of million-dollar flat transactions hit a record high.