HDB flash estimate shows 2.6% q-o-q increase in resale flat prices in 2Q2022

By Hailey Yu
/ EdgeProp Singapore |
Resale transactions in 2Q2022 rang in at 6,475 units, lower than the 6,934 flats sold the previous quarter (Photo: Samuel Isaac Chua/EdgeProp Singapore)
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SINGAPORE (EDGEPROP) - HDB’s flash estimate for 2Q2022 resale price index showed a 2.6% q-o-q increase over 1Q2022. This is slightly higher than the 2.4% q-o-q growth in 1Q2022.
Still, HDB resale prices are showing signs of slower growth momentum, according to Nicholas Mak, ERA head of research and consultancy. In 1H2022, HDB resale housing prices have risen by 5.1% compared to 6% growth in the first half of 2021, he points out.
However, resale transactions in 2Q2022 rang in at 6,475 units, lower than the 6,934 flats sold the previous quarter, observes Wong Siew Ying, PropNex head of research and content. She attributes the lower transaction volume to limited resale stock and a mismatch in price expectations between buyers and sellers. “The BTO [Built-to-Order new flats] exercise in May could [also] have siphoned off some demand from the resale market,” she says.
While homebuyers are increasingly more resistant to paying higher prices and cash over valuation, some are chasing the limited supply of five-room and larger HDB flats, says Lee Sze Teck, Huttons Asia senior director of research. “This has pushed up the prices of such flats and caused more to cross the million dollar price in 2Q2022,” he adds.
According to Lee, 2Q2022 saw 165 resale flat transactions of at least $1 million. This is 60% higher than the number of million-dollar-flats sold in the whole of 2021, he adds. Lee predicts that this year could end with more than 300 flats sold in the million-dollar range.
Median resale prices of flats increased for 21 out of 26 HDB towns in 2Q2022, says
Christine Sun, OrangeTee & Tie senior vice president of research & analytics. “The continued price growth signifies buyer confidence from the reopening of the economy,” she motes. HDB towns in the Central area saw the most significant increase of 18%, y-o-y in 2Q2022. Ang Mo Kio and Serangoon towns led the way with median price growth of 17.5% and 14.2% y-o-y growth respectively in 2Q2022.
One of the main drivers of public housing price growth has been pandemic-related supply chain disruptions, shortage of manpower and building materials, leading to disruptions in construction of new BTO flats, points out ERA’s Mak. “The delay in the completion of BTO flats pushed some homebuyers to turn to the HDB resale market,” he says. “However, the disruption in the construction of HDB flats is gradually easing.”
The government has ramped up supply of BTO flats, for example, in May, 4,583 new BTO flats were launched for sale in five estates, including those in popular, mature estates. This has diverted some homebuyers from the HDB resale market back to BTO flats, says Mak.
In August, HDB announced that it will offer about 4,900 BTO flats in towns such as Ang Mo Kio, Bukit Merah, Choa Chu Kang, Jurong East, Tampines and Woodlands. Another 9,500 BTO flats will be offered for sale in estates such as Bukit Batok, Kallang Whampoa, Queenstown and Yishun. Overall, HDB is on track to launch up to 23,000 new flats in 2022. (Find HDB flats for rent or sale with our Singapore HDB directory)
“In the coming months, the demand for HDB resale flats are expected to remain healthy,” says ERA’s Mak. Although the public housing resale market could face headwinds from rising interest rates and the risks of an economic slowdown, the rising supply of attractively priced BTO flats would be the main factor for diverting demand from the resale market, subsequently slowing down the pace of HDB resale price appreciation, he adds.
While HDB resale market is expected to perform well in 2022, prices are likely to climb at a slower pace of 7% to 9%, as opposed to the 12.7% increase in 2021, notes PropNex’s Wong. “Some of the demand drivers of resale flats will include the preference for more spacious homes, desire for a move-in ready flat to avoid any completion delays of new builds, and generally still affordable prices for many Singaporean households – about 68% of HDB resale flats sold in Q2 2022 were priced below $600,000, according to transaction data.”

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