HDB resale flat prices climb 2.8% in 2Q2022; transaction volume soften for third quarter

By EdgeProp Singapore / EdgeProp Singapore | July 23, 2022 1:22 AM SGT
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SINGAPORE (EDGEPROP) - Figures released by HDB showed that resale flat prices rose by 2.8% q-o-q in 2Q2022, building on the 2.4% growth in 1Q2022. The final figures released were higher than the 2.6% flash estimate released on July 1, says Wong Siew Ying, PropNex head of research & content. This brings the 1H2022 HDB resale price increase to 5.3%.
According to HDB, 6,819 resale flats were transacted in 2Q2022, about 1.7% lower than the 6,934 flats sold in the previous quarter. Typically, transaction activity tends to pick up in the second quarter after a lull in the first quarter, says Lee Sze Teck, Huttons Asia senior director of research. “This is the third quarter of decline and points to signs of the market losing momentum,” he adds. “It is also the lowest quarterly sales since the circuit breaker in 2Q2020.”
PROPNEX HDB CHART - EDGEPROP SINGAPORE
Source: PropNex Research, HDB
Based on HDB resale transaction data, median prices of three-, four- and five-room resale flats ranged from $368,000 to $610,000 in 2Q2022 – up by 1.7% to 3.0% from the median resale prices in 1Q2022 of $358,000 - $600,000. “With more newly MOP flats expected to hit the resale market in the coming months, we expect that median prices will remain firm,” says PropNex’s Wong.
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YISHUN - EDGEPROP SINGAPORE
Transaction data showed that non-mature towns such as Yishun (pictured), Sengkang, Punggol and Woodlands were the most popular estates in 2Q2022 (Photo: The Edge Singapore)
Transaction data showed that non-mature towns Sengkang, Punggol, Yishun, Woodlands and Jurong West were the most popular estates in 2Q2022, accounting for over one-third of the quarter’s transactions including a number of flats that have recently achieved the minimum occupation period (MOP) among the resale transactions, adds Wong.
“The trend of million-dollar flats showed no signs of abating,” says Huttons’ Lee. “They made up more than 1% of total resale flat transactions and could exceed 300 in 2022. There may be more larger flats in non-mature estates breaching the million dollar mark in the months ahead.”
Still, more buyers are resisting paying higher prices for a resale flat, adds Huttons’ Lee. It was observed that there is an increasing number of resale flats whose transacted price matches the valuation price, leading to zero cash over valuation. “Some buyers may have applied for BTO flats at Yishun which has a shorter construction period or tried their luck at May 2022’s SBF [sale of balance flats] exercise,” he reckons.
HDB JURONG EAST - EDGEPROP SINGAPORE
Despite firmer resale prices, some flat owners may be less inclined to sell as they perceive that the cost of buying a replacement home of a similar size would be high in the current market (Photo: Samuel Isaac Chua/EdgeProp Singapore)
HDB resale flat prices should trend towards more stability for 2H2022. “Rising interest rates and more affordable BTO flats with a shorter construction period will divert some demand away from the resale market,” according to Huttons. Buyers of a BTO flat will also be able to defer their payment till key collection, which will allow buyers to tide over the current high interest rate environment. Huttons expect HDB resale prices to increase up to 10% in 2022. (Find HDB flats for rent or sale with our Singapore HDB directory)
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PropNex, on the other hand, is projecting full year increase of between 7% and 9%. “The HDB resale market is on track to achieve another year of healthy price growth,” PropNex’s Wong agrees. “The tight resale flat supply is helping to prop up prices amid steady demand from various groups of buyers.” These include first-time homebuyers who prefer ready-built flats, buyers who have been priced out of the private residential market, upgraders in search of a larger flat, as well as those who have sold their private home and are looking to purchase an HDB flat on the secondary market.
HDB Resale Price Index
QOQ % change
YOY % Change
Q1 2020
0.0%
0.4%
Q2 2020
0.3%
0.8%
Q3 2020
1.5%
2.3%
Q4 2020
3.1%
5.0%
Q1 2021
3.0%
8.1%
Q2 2021
3.0%
11.0%
Q3 2021
2.9%
12.5%
Q4 2021
3.4%
12.7%
Q1 2022
2.4%
12.2%
Q2 2022
2.8%
12.0%
Source: PropNex Research, HDB
“With interest rates set to rise further, some buyers may decide to play it safe and opt to purchase a resale flat, which is generally more affordable compared to a private condo,” adds Wong.
Despite firmer resale prices, some flat owners may be less inclined to sell as they perceive that the cost of buying a replacement home of a similar size would be high in the current market, according to Wong. “This ongoing demand and supply dynamics is expected to continue to be supportive of HDB resale prices over the next couple of quarters,” she adds.
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