Resale flat prices up 1.2% in 3Q2023: HDB flash estimates
HDB resale flat prices have seen a 14th consecutive quarter of growth, according to HDB’s Flash estimates released for 3Q2023. Prices edged up 1.2% q-o-q in 3Q2023, slower than the 2.5% average quarterly growth registered in 2022. Christine Sun, senior vice president of research and analytics at OrangeTee & Tie suggests that price resistance is beginning to set in due to inflationary and affordability concerns. Year-to-date, 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.
There were 6,592 resale flat transactions in 3Q2023, 2.9% higher than the previous quarter, but 9.7% lower y-o-y. This is the lowest 3Q volume recorded in the last three years since 2020. According to Mohan Sandrasegeran, head of research and data analytics at SRI, the higher volume could be attributed to higher grants given to first-time home buyers as well as the delay in the August Build-To-Order (BTO) sales launch.
Lee Sze Teck, senior director of data analytics at Huttons Asia, highlights how the higher resale prices and transaction volume are related to the National Day Rally on Aug 20. Under the new classification system for BTO projects, Standard, Plus and Prime flats will be categorised based on locational attributes. Plus and Prime flats come with more subsidies and tighter restrictions, such as a longer minimum occupation period of 10 years.
The impending reclassification of housing policies is stimulating greater demand for existing resale flats in mature estates that will not face restrictions on resale. Buyers are reportedly willing to pay more for such flats, which may be the cause of the estimated 127 resale flats that were transacted for at least $1 million in 3Q2023. That’s 21% more than the previous quarter.
In October, 6,800 BTO flats in Choa Chu Kang, Kallang Whampoa, Queenstown and Tengah will be offered, with 6,000 more in December located in estates such as Bukit Panjang, Jurong West, Woodlands, Bedok, Bishan, Bukit Merah and Queenstown. OrangeTee & Tie’s Sun predicts that prices may climb slower for the rest of the year, with full-year growth at around 4% to 5.5%.
Along with the Orchard Boulevard MRT Condo, public transport access is also highly efficient. Closest MRT station is the Orchard MRT station is within walking distance.
With the impending supply and affordability concerns, the upward trajectory of HDB resale flat prices may be affected. Prices continued their upward route in 3Q2023 at a slower rate, but still marked 14 consecutive quarters of growth. Inflationary and affordability issues have slowed the pace of the increases, while incoming supply may further dampen the trend.
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