HDB prices mark 13th straight quarterly increase, rising 1.5% in 2Q2023
The HDB resale price index marked a 1.5% q-o-q increase in 2Q2023, extending from the 1% q-o-q rise seen in 1Q2023. This marks the 13th consecutive quarter of rising prices in the public housing market.
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Transaction volumes have dipped despite the frequent rise in prices. Last quarter recorded 6,514 resale flats, which is the lowest since 2Q2020 when 3,426 units were sold. Senior Vice President of Research & Analytics at OrangeTee&Tie, Christine Sun explains this might be due to an increase in housing grants given to resale flat buyers. Lee Sze Teck, Senior Director of Data Analytics at Huttons Asia, agrees. He believes the increasing grants may have bolstered demand, thus leading to the 1.5% price growth.
Eugene Lim, Key Executive Officer of ERA Realty, points to government efforts to temper the market as a potential cause for the slower price growth this year. This includes initiatives such as increasing BTO supply, lowering the loan-to-value ratio to 80%, and introducing a wait-out period for private property owners downgrading to an HDB flat.
Breaking down the quarterly statistics, we discover the median price of flats increased in 18 out of 26 towns. Geylang recorded the highest quarterly price growth of 19.2%, closely followed by Ang Mo Kio at 8.4%, the Central Area at 6.8%, and Bukit Panjang at 6.1%. The highest resale transaction volumes were seen in Punggol, Woodlands, Sengkang, Yishun, and Bukit Batok.
Million-dollar flats have continued to stand out over the last six months, with 105 and 103 transactions recorded in both 1Q2023 and 2Q2023 respectively. The median prices of four-room Resale HDB flats hitting the million-dollar mark has seen a notable increase, from 20.4% in 1Q2023 to 30.5% in 2Q2023.
Looking ahead, the government plans to launch 13,000 BTO flats in 2H2023, with 6,700 units ready by the end of September or early October. Sun predicts first-time buyers may be enticed by the introduction of flats in mature towns such as Kallang/ Whampoa, Queenstown, Bedok, and Bukit Merah.
Lim believes the pipeline of BTO projects, as well as the various initiatives taken by the government, will help stabilise the HDB flat market in the long run. He also cautions that buyers will be reluctant to pay over $1.1 million for an HDB flat, as they’ll need to face higher replacement costs.
Overall, the HDB resale market is expected to remain resilient in 2H2023, with grants, projects and initiatives acting as a catalyst to bolster prices.