HDB resale price growth slows, even as number of million-dollar transactions hit record high

/ EdgeProp Singapore |

October 13, 2023 5:18 PM SGT

Million-dollar resale flat transactions reached a record 128 units in 3Q2023 (Picture: Samuel Isaac Chua/The Edge Singapore

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SINGAPORE (EDGEPROP) - Price resistance has set into the HDB resale market, with resale flat prices growing at a slower pace in 3Q2023. This comes even as on the other side of the spectrum, million-dollar flat transactions reached a record 128 units in the same quarter, notes Orange Tee & Tie in an October research report. “Last quarter’s slower price growth for the overall market and price falls in certain towns indicate more consumers are pushing back on further price hikes,” says Christine Sun, senior vice president of research & analytics at OrangeTee & Tie.

In 3Q2023, HDB resale prices edged up 1.2% q-o-q, charting a 14th consecutive quarter of growth. Nonetheless, the growth is smaller than the 1.5% q-o-q increase logged in 2Q2023 and the 2.5% average quarterly growth clocked in 2022. Year-to-date, prices increased by 3.8% in the first nine months of this year, which is less than the 8% growth over the first three quarters of 2022.

OrangeTee & Tie observes that the slower growth in resale flat prices comes amid inflationary concerns, as home buyers’ affordability was hit by interest rates that have stayed elevated for longer than anticipated.

Four-room flats saw the biggest growth in resale prices, climbing 1.8% q-o-q from $579,740 in 2Q2023 to $589,992 in the third quarter, based on HDB data from data.gov.sg. This was followed by executive flats, which grew by 1.2% from an average of $827,549 to $$837,138.

The report also highlights that average resale prices declined in 10 towns in 3Q2023, more than the six towns recorded in the prior quarter. Geylang charted the biggest fall of 3.6% q-o-q, followed by the Central Area (down 3.4%), Bukit Batok (down 2%) and Sembawang (down 1.8%). On the flip side, Bukit Timah and Serangoon saw the biggest q-o-q price growths in 3Q2023 at 38.1% and 10.8% respectively.

Source: OrangeTee & Tie

Despite the fall in prices, HDB resale transaction volumes rose 2.9% q-o-q in 3Q2023 to reach 6,592 units (based on data up until Sept 28). OrangeTee & Tie's Sun attributes this to more grants given to first-timers purchasing HDB resale flats, as well as the delay in the August Build-To-Order (BTO) sales launch, which diverted more Singaporeans to the resale market.

However, on a y-o-y basis, volume is 9.7% lower than in 3Q2022, which salw 7,298 units changing hands.

In terms of proportion of sales, four-room flats dipped from 45.7% in 2Q2023 to 43.8% in 3Q2023, while five-room flats declined from 23.4% to 22.9% over the same period, based on HDB transactions from data.gov.sg.

Conversely, the proportion of buyers going for executive flats rose from 5.5% to 5.9%. The same goes for two-room flats, which climbed from 2.3% to 2.8%, and for three-room flats, which increased from 23.1% to 24.6%

Sengkang saw the highest volume at 504 units, followed by Punggol (499 units), Woodlands (497 units), Yishun (454 units), and Jurong West (439 units).

Source: OrangeTee & Tie

Million-dollar resale flats hit a new record in 3Q2023, with 128 units sold for at least $1 million. This surpasses the previous quarterly record of 111 units in 3Q2022. “2023 will likely smash 2022’s full-year record of 369 units, as 336 million-dollar flats have already been inked in the first nine months of this year,” Sun remarks.

Last quarter, Bukit Panjang saw its first million-dollar flat transaction at $1.02 million for a 1,367 sq ft executive flat at Jelebu Road. Currently, only four towns – Sengkang, Choa Chu Kang, Jurong West and Sembawang – have yet to log a million-dollar flat transaction.

OrangeTee & Tie predicts Segkang could be the next town to see a million-dollar flat transaction, considering the estate has already seen ten units sold for at least $900,000. In comparison, Choa Chu Kang and Jurong West have only registered two such deals respectively, while Sembawang has yet to see a million-dollar flat transaction.

Looking ahead, OrangeTee & Tie believes affordability will continue to be influenced by the interest rate environment. “The HDB loan packages offered by many local banks are above 3%, and not everyone qualifies to take a loan from HDB pegged at 2.6%,” Sun points out. In addition, more demand may be diverted to the BTO market as more flats are slated for sale.

In view of these factors, resale prices are expected to grow at a more measured pace. OrangeTee & Tie is projecting a full-year price growth of around 4% to 5.5% for HDB resale flats in 2023 – significantly lower than the 12.7% growth logged in 2021 and 10.4% growth recorded in 2022.

In terms of volume, the firm predicts resale flat transactions to dip slightly to about 26,000 to 27,000 units this year, compared to 27,896 units in 2022.

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