Resale flat prices up 1.2% in 3Q2023: HDB flash estimates

HDB resale flat prices in 3Q2023 edged up 1.2%, reflecting 14 consecutive quarters of growth. The slower quarter-on-quarter increase in prices could point to price resistance setting in. This follows the announcement of higher grants to first-time home buyers and a change in housing policies announced during the National Day Rally.Mohan Sandrasegeran, head of research and data analytics at SRI, attributes the higher volume to changes in housing policies that have shifted demand to resale flats in mature estates. Statistics show that there were an estimated 127 resale flats transacted for at least $1 million in 3Q2023, 21% more than the previous quarter.Year-to-date, HDB resale flat prices have grown 3.8%, significantly lower than the 8% increase recorded in 2022 and the 9.1% increase recorded in 2021 across the same period. Christine Sun, senior vice president of research and analytics at OrangeTee & Tie predicts that prices may climb slower for the rest of the year, with full-year growth of around 4% to 5.5%.In 3Q2023, a total of 6,592 resale flat transactions were recorded, 2.9% higher than the previous quarter, but 9.7% lower year-on-year. Lee Sze Teck, senior director of data analytics at Huttons Asia, notes that the November Build-To-Order (BTO) exercise, where balance flats are sold, has been pushed to December. HDB also announced that about 6,800 BTO flats will be offered in the upcoming October sales launch. In December, roughly 6,000 more flats will be put up for sale.With the increased incoming supply and ongoing concerns on affordability, as well as the higher grants and more ballot chances for first-time home buyers, resale flat price growth may be tempered in the upcoming months.HDB resale flat prices in 3Q2023 continued their upward trajectory, albeit at a slower pace, edging up 1.2% q-o-q. The higher volume may be attributed to higher grants given to first-time home buyers, as well as a delay in the August BTO sales launch. An estimated 127 resale flats were transacted for at least $1 million, 21% more than the previous quarter.Year-to-date, resale flat prices have grown 3.8%, significantly lower than the 8% and 9.1% increases recorded in 2022 and 2021, respectively. Christine Sun, senior vice president of research and analytics at OrangeTee & Tie predicts that prices may climb slower for the rest of the year, with full-year growth of around 4% to 5.5%.

HDB resale flat prices in 3Q2023 continued their upward trajectory, albeit at a slower pace. Flash estimates released by HDB show that prices edged up 1.2% q-o-q, marking a 14th consecutive quarter of growth. This is lower than the 1.5% q-o-q growth recorded in 2Q2023 and the 2.5% average quarterly growth registered in 2022.

The slower increase in prices may indicate price resistance setting in amid inflationary and affordability concerns, notes Christine Sun, senior vice president of research and analytics at OrangeTee & Tie. This is reflected in the 3.8% year-to-date growth, significantly lower than the 8% and 9.1% increases recorded in 2022 and 2021, respectively.

A total of 6,592 resale flat transactions were recorded by HDB in 3Q2023, 2.9% higher than the previous quarter. This is the lowest 3Q volume recorded in the last three years since 2020. Sun attributes the higher volume to the higher grants given to first-time home buyers, as well as a delay in the August Build-To-Order (BTO) sales launch.

Mohan Sandrasegeran, head of research and data analytics at SRI, concurs and adds that the November BTO exercise has been pushed to December. “The change in schedule has likely prompted couples in urgent need of housing to focus on the HDB resale market as it represents a more immediate and accessible option,” he comments.

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Lee Sze Teck, senior director of data analytics at Huttons Asia, observes that the higher resale prices and volumes follow changes to housing policies announced during the National Day Rally. From 2H2024, BTO projects will be categorised as Standard, Plus or Prime flats. As a result, demand has shifted to existing resale flats in mature estates that will not face restrictions on resale – leading to higher million-dollar resale flat transactions.

Statistics show that there were an estimated 127 resale flats transacted for at least $1 million in 3Q2023, 21% more than the previous quarter. Lee adds that in August, 50 out of 54 million-dollar flats took place in mature estates. He expects million-dollar HDB transactions to exceed 400 for the whole year.

HDB has announced that about 6,800 BTO flats will be offered in the upcoming October sales launch, in addition to the roughly 6,000 flats to be put up for sale in December. Sun predicts that increased incoming supply and ongoing affordability concerns will likely temper resale flat price growth. “Prices may climb slower for the rest of the year, with full-year growth at around 4% to 5.5%,” she says.