HDB resale flat prices grow at slower pace in Q1 on higher inventory, price resistance

Apr 28, 2023

PRICES of resale flats in the first quarter of 2023 inched up 1 per cent from Q4 2022 – the smallest quarterly increase compared with the previous 10 quarters.

Transaction volume showed slightly stronger recovery, rising 5.8 per cent to 6,979 units, from 6,597 units in Q4 2022, going by data from the Housing and Development Board (HDB) on Friday (Apr 28).

Christine Sun, OrangeTee & Tie’s senior vice-president of research and analytics, pointed to higher housing inventory as more flats were completed in recent months. The Singapore government also continued to launch Build-To-Order (BTO) projects and release new flats for sale.

The slow price growth could also be due to seasonal factors, said Mogul.sg chief research officer Nicholas Mak, adding that this is a trend that has been observed since 2007.

Price resistance could also be setting in, said Eugene Lim, ERA’s key executive officer.

“We see a widening disparity between the expectations of sellers and buyers. Homebuyers are reluctant to match the high asking prices of sellers because this could well mean paying higher cash-over-valuation,” he said.

He noted that first-time buyers tend to be more price sensitive with smaller budgets. On the other hand, sellers are holding their prices as replacement property prices remain equally high.

Notably, the number of resale flat transactions for four-room flats and smaller rose 8.2 per cent to 5,000 units in Q1 2023, from 4,622 units in Q4 2022. This comes as cooling measures and rising interest rates dent buyers’ housing affordability, noted Sun.

The biggest increase came from two-room flats, which climbed 39 per cent on the quarter. In contrast, executive flats’ volumes fell 3.7 per cent.

PropertyGuru Singapore country manager Tan Tee Khoon said Woodlands, Punggol and Yishun were the top-performing estates for HDB resale deals, going by HDB transaction data as at Apr 27. He noted that most BTO flats in these areas fulfilled their minimum occupation periods this year.

On the rentals front, the number of approved applications for HDB rentals rose 13.9 per cent to 9,657 cases, from 8,476 cases in the previous quarter, HDB said. Year on year, the number of approved applications was 5.2 per cent lower.

This brings the total number of HDB flats rented out in the first quarter to 56,652 units, up marginally from the 56,647 units in the previous quarter.

The HDB town with the highest median rent for three-room flats was Central at S$2,980 per month. Queenstown saw the highest median rents for four-room and five-room flats at S$3,800 and S$4,300 per month, respectively.

The HDB towns with the highest median resale price for three-room flats were Punggol and Central at S$450,000. For four-room flats, the highest median resale price came from Queenstown at S$864,000.

The highest median resale price for five-room flats was recorded in Bishan at S$900,000, while the highest posted for executive flats was in Bedok at $865,000.

In May 2023, HDB will offer about 5,400 Build-To-Order flats in Bedok, Kallang Whampoa, Serangoon and Tengah. It will offer 5,200 to 6,200 flats in August, subject to review. This will be in towns or estates such as Bukit Merah, Choa Chu Kang, Kallang Whampoa, Queenstown and Tengah.

https://www.businesstimes.com.sg/pro...ice-resistance