HDB resale flat prices up 1.3% q-o-q in 3Q2023, slower previous quarter

Many cooling measures have been introduced to promote a stable and sustainable property market, as resale flat prices in Singapore rose 1.3% q-o-q in 3Q2023 according to data released by HDB on Oct 27.

This is marginally higher than its 1.2% growth in the flash estimates released earlier this month and confirms a 14th consecutive quarterly increase, however the growth is lower than the 1.5% q-o-q increase recorded in 2Q2023 and the average quarterly price growth of 2.5% registered in 2022.

Year-to-date, resale flat prices have risen 3.8%, significantly lower than the 8% and 9.1% growth seen over the same period in 2022 and 2021 respectively, thus indicating the effectiveness of the cooling measures and increased housing supply.

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In 3Q2023, 6,695 flats changed hands – 2.8% q-o-q higher than the previous quarter, yet 11.3% lower y-o-y. This is the lowest third quarter resale volume recorded since 2020 and is likely due to economic headwinds, delays to Build-to-Order (BTO) launches and news on potential changes to housing policies.

The proportion of sales for four-room flats has increased from 41.7% in 3Q2022 to 43.8% in 3Q2023, due to its relative affordability, in addition to those seniors above 55 years old not needing to wait out the 15-month wait-out period if they choose to buy a 4-room flat.

Rental volume in the HDB market also edged up 0.1% q-o-q to 9,852 approved applications – 20.3% higher y-o-y – with 57,797 HDB flats rented out, increasing by 1.7% q-o-q.

Nevertheless, demand for flats in mature estates is still strong, with buyers paying more for a flat that will not face restrictions on resale, even with fewer sellers putting their flats up for sale in these areas. Plus and Prime flats will come with more subsidies and stricter resale conditions such as a minimum occupation period of 10 years and limitations for rent.

128 flats were sold for at least $1 million in 3Q2023, which is 21.9% higher than the previous quarter. It is likely that the number of million-dollar flats will exceed 400 and account for around 1.6% of total transactions this year.

HDB has launched some 16,700 flats this year, and will offer roughly 6,000 BTO flats for sale in December. OrangeTee & Tie believes that some demand will be diverted from the resale market to the BTO markets, and that the increase in Additional Buyer’s Stamp Duty may lead to fewer upgraders and less housing stock available for sale, though this may be offset by the completion of new condos.

In terms of prices, it is expected that full-year resale flat price growth will be between 4% to 5.5%, lower than the 10.4% growth recorded in 2022 and the 12.7% growth seen in 2021.