HDB resale price growth slows, even as number of million-dollar transactions hit record high
Million-dollar resale flats hit a new record in 3Q2023, with 128 units sold for at least $1 million. Despite the fall in prices, HDB resale transaction volumes rose 2.9% q-o-q in 3Q2023 to reach 6,592 units (based on data up until Sept 28).This comes even as on the other side of the spectrum, prices for the overall market showed slower growth or even a decline in certain towns, which indicates more consumers are pushing back against further hikes.
Price resistance has set into the HDB resale market, with resale flat prices growing at a slower pace in 3Q2023. Christine Sun, senior vice president of research & analytics at OrangeTee & Tie notes that last quarter’s slower price growth along with price falls in certain towns suggests that consumers are pushing back on prices.
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In 3Q2023, HDB resale flat prices increased by 1.2% q-o-q, marking 14 consecutive quarters of growth, yet smaller than the 1.5% q-o-q rise in 2Q2023 and 2.5% average quarterly growth in 2021. Prices have risen 3.8% y-t-d in 2023, lower than the 8% growth over the same period in 2021.
Four-room flat prices were up 1.8% q-o-q with the average prices being $589,992 in the third quarter. This was followed by executive flats, with an increase of 1.2% q-o-q from an average of $827,549 to $837,138. The biggest q-o-q price declines were in Geylang and Central Area at 3.6% and 3.4%, respectively.
Resale transaction volumes rose 2.9% q-o-q, amounting to 6,592 units up until the end of September. However, on a y-o-y basis, the volume was still 9.7% lower than 3Q2022 which saw 7,298 units changing hands. Four-room flats and five-room flats proportions have dipped at 43.8% and 22.9% respectively, while executive and two-room flats proportions have increased at 5.9% and 2.8%.
Looking at the town with the highest volumes, Sengkang saw 504 units sold, followed by Punggol (499 units), Woodlands (497 units), Yishun (454 units), and Jurong West (439 units).
At the other end of the spectrum, the number of million-dollar flat transactions hit a new record in 3Q2023 at 128 units. This surpasses the previous record of 111 units in 3Q2022, and 2023 is expected to surpass 2022’s full-year record of 369 units, as 336 million-dollar flats have already been sold in the first nine months of this year.
OrangeTee & Tie predicts that the affordability will continue to be influenced by the interest rates environment, with HDB loan packages offered by local banks above 3% not being easily achievable for everyone. Furthermore, the projected entry of more new flats in the market may draw more buyers away from the resale market.
In view of these, OrangeTee & Tie projects a full-year price growth of around 4% to 5.5% for HDB resale flats in 2023. Volume is projected to dip marginally to around 26,000 to 27,000 units in 2023 from 27,896 units recorded in 2022.