HDB prices for resale continue to rise, though at a slower rate than in the past, despite a record amount of transactions worth millions of dollars
OrangeTee & Tie believes Sengkang will be the next town with a million dollar flat transaction. This is because the estate has seen ten apartments sold for at least $950,000. Choa Chu Kang, Jurong West and Sembawang have all only seen two million-dollar deals.
OrangeTee & Tie predicts that interest rates will continue to influence affordability in the future. Sun says that the HDB loan packages are offered by local banks at rates above 3%. Not everyone is eligible to receive a HDB loan of 2.6%. As more flats go up for sale, there may also be a shift in demand to the BTO.
Bukit Panjang’s first million-dollar apartment transaction was $1.02m for a 1,367 sqft executive apartment at Jelebu Road. Only four towns have not yet recorded a million dollar flat transaction – Sengkang (Chou Chu Kang), Jurong West, and Sembawang.
In 3Q2023, 128 flats sold at least $1,000,000 set a new quarterly record. The previous record for a quarter was 111 units, set in 3Q2022. Sun says that 2023 is likely to smash the 369 unit record set in 2022 for a full year, since 336 million dollar flats were already signed in the first nine month of this calendar year.
Similarly, the percentage of buyers who chose executive apartments increased from 5.5% up to 5.9%. Two-room apartments also increased in popularity, from 2.3% to 2,8%. Three-room apartments went from 23,1% to 24,6%.
On a year-over-year basis, however, the volume is 9.7% less than 3Q2022, when 7,298 units were sold. According to HDB transactions, the proportion of four-room apartments sold dropped from 45.7% to 43.8% between 2Q2023 and 3Q2023, whereas five-room apartments fell from 23.4% down to 22.9%.
HDB resale transactions rose 2.9% from 3Q2023 (based on the data collected up to Sept 28) despite the price drop. OrangeTee & Tie’s Sun attributes the increase to grants for first-time buyers of HDB resale apartments, and the delayed launch of the Build-To Order (BTO), which diverted many Singaporeans into the resale sector.
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Geylang recorded the largest drop of 3.6% q-o-q, followed by the Central Area (down 3.4%), Bukit Batok (down 2%) and Sembawang (1.8%). Geylang recorded the largest drop of 3.6% from quarter-to-quarter, followed by Central Area (down 2.8%), Bukit Batok (2%) and Sembawang (1.8%). Bukit Timah, Serangoon and Central Area saw the largest q-o q price increases in 3Q2023. These were 38.1% and 10% respectively.
Based on HDB data, data.gov.sg, four-room flats have seen the largest growth in resale price, rising 1.8% from $579.740 in 2Q2023, to $589.992 in 3Q2023, a jump of 1.8%. The executive flats were next, with a 1.2% increase from $827,549 on average to $837,138.
OrangeTee & Tie notes that inflationary concerns are behind the slower growth of resale prices, with homebuyers’ affordability being affected by higher interest rates than expected.
HDB resale price growth in 3Q2023, a 14. consecutive quarter of increases, was 1.2% qoq. The growth in 3Q2023, however, is less than the 1.5% increase in 2Q2023 or the 2.5% quarterly average growth in 2022. Prices have increased 3.8% year-to-date in the first nine month of this calendar year. This is lower than the 8% increase over the first three months of 2022.
HDB flat prices have been growing slower in the 3Q2023, indicating a price resistance. On the other hand, the number of million-dollar flats sold in the same period reached a new record. The slower growth in prices for the market as a whole and the price drops in some towns last quarter indicate that consumers are resisting further price increases.