SINGAPORE — Prices of Housing Board resale flats rose by 4.9 per cent in 2023, marking the slowest year-on-year growth since the 0.1 per cent increase recorded in 2019 before the pandemic.
In 2023, HDB resale flat prices grew less than half of the 10.4 per cent increase seen in 2022, in a sign that property prices are moderating. In 2021, prices surged by 12.7 per cent.
This comes on the back of a slower price growth of 1.1 per cent in the fourth quarter of 2023, lower than the 1.3 per cent growth seen in the previous quarter, data released by HDB on Jan 26 showed.
Estimates based on earlier flash data by HDB had resale prices rising by 4.8 per cent in 2023, slightly lower than the final figure of 4.9 per cent.
Subdued housing demand, higher interest rates and inflationary concerns among buyers likely contributed to the slower price growth in 2023, said Ms Christine Sun, chief researcher and strategist at OrangeTee Group.
In addition, fewer buyers paid cash over valuation (COV) for their resale flats in 2023, with about 15 per cent doing so in the last three months of the year, according to figures from the Ministry of National Development.
This is down from 30 per cent in the same period in 2022.
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COV is the difference between the sale price of a flat and its actual HDB valuation, which can be paid for only in cash by the buyer.
Ms Sun noted that in the fourth quarter of 2023, average resale prices rose in 14 HDB towns, down from 16 towns in the third quarter, and price gains were mostly less than 2 per cent.
In the fourth quarter of 2023, prices of four-room flats grew by 0.7 per cent, followed by three-room and five-room units at 0.6 per cent. Prices of executive flats rose by 0.3 per cent while two-room flats edged up by 0.1 per cent, she added.
Huttons Asia senior director of data analytics Lee Sze Teck said Punggol led the pack with the most HDB resale transactions recorded in 2023 at more than 2,000 units, followed closely by Woodlands, Sengkang, Yishun and Tampines.
In total, they account for 37.1 per cent of total HDB resale transactions in 2023.
To date, the most expensive HDB resale unit to change hands is an adjoined flat at 50 Moh Guan Terrace in Tiong Bahru for $1.5 million. The 50-year-old flat was sold in May 2023.
To date, the most expensive HDB resale flat to change hands is an adjoined flat at 50 Moh Guan Terrace in Tiong Bahru for $1.5 million. PHOTO: ST FILE
A total of 470 HDB resale flats changed hands for at least $1 million in 2023, an increase from the 369 such units sold in 2022. However, these flats remain the minority, making up around 1.8 per cent of total transactions in 2023.
Fewer buyers paid COV for resale HDB flats in 2023, property market expected to moderate further
How HDB market will fare with more new units in 2024
In 2023, fewer HDB resale flats changed hands, with the number falling by 4.2 per cent from 27,896 units in 2022 to 26,735 units in 2023.
The increased number of Build-To-Order (BTO) flats launched by HDB offered buyers more options and drew some demand away from the resale market, said Huttons’ Mr Lee.
In the last three years, HDB put up more than 63,000 BTO flats for sale.
In 2024, some 19,600 BTO flats will be launched, including 2,800 flats with shorter waiting times of below three years. These will be offered across three sales exercises in February, June and October, down from the previous four launches a year.
In February, home seekers can look forward to about 4,100 BTO flats in Bedok, Queenstown, Choa Chu Kang, Hougang, Punggol and Woodlands and another 1,500 flats under the Sale of Balance Flats exercise.
The new classification of flats into Standard, Plus or Prime categories will take effect from the October launch, which will also be the largest in 2024.
OrangeTee’s Ms Sun said the dwindling stock of HDB resale flats that will be eligible for sale and rent in 2024, along with increased BTO supply, may shift demand away from the resale market.
However, not all analysts share the same view.
Mr Mohan Sandrasegeran, head of research and data analytics at property firm SRI, said less frequent BTO sales exercises and limited availability of flats may instil a sense of urgency among home seekers, and thus redirect demand to the resale market.
Ms Sun said about 11,900 units are expected to complete their mandatory five-year minimum occupation period (MOP) in 2024, down from 15,500 units in 2023.
As a result, she expects HDB resale prices to rise modestly by 3 per cent to 5 per cent in 2024, at a comparable rate with 2023.
Mr Nicholas Mak, chief research officer at property search portal Mogul.sg, shared similar predictions of a modest price growth ranging from 3 per cent to 6 per cent in 2024.
“Many home buyers are losing the fear of missing out, and the ample supply of BTO flats is drawing demand away from the HDB resale market,” he said.
“In addition, the declining proportion of HDB resale flats transacted with COV indicates that the days of the HDB resale market being a seller’s market are numbered.”
Some younger home owners prefer HDB resale flats that offer bigger living spaces, more amenities
New Plus flats could ease BTO lottery effect but push up demand for existing flats: Analysts
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