New Reporter
27-10-23, 19:01
HDB resale prices up 1.3% in Q3, but growth easing amid cooling measures, economic headwinds
Oct 27, 2023
RESALE prices of public housing flats are finally starting to moderate, following several waves of cooling measures and ongoing economic uncertainty, said analysts.
Data from the Housing and Development Board (HDB) showed that prices of resale flats inched up 1.3 per cent in the third quarter of this year – a notch higher than the earlier estimated 1.2 per cent released on Oct 2.
This followed a 1.5 per cent hike in Q2. The rise in Q3 also remained below the average quarterly growth of 2.5 per cent in 2022, noted Eugene Lim, ERA key executive officer.
For the first nine months of 2023, resale prices rose by 3.8 per cent – less than half the 8 per cent growth in the same period a year ago.
Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, pointed out that even though this is the 14th straight quarter of growth, the increases this year are “noticeably slower” than those of previous years, being consistently below 2 per cent per quarter.
In comparison, quarterly price growth was above 2 per cent for each quarter in 2022 and above 2.9 per cent for each quarter in 2021.
“The trends indicate that the cooling measures and the increased housing supply are effective in taming price hikes,” she said.
The slowing economy and weaker job market also mean that there is weaker upgrading demand among some homebuyers, said Nicholas Mak, chief research officer at Mogul.sg.
Meanwhile, transaction volumes of resale flats rose 2.8 per cent in Q3 to 6,695 units, from the 6,514 units in the previous quarter. Year on year, this was an 11.3 per cent decline. The resale volume was the lowest recorded in the third quarter over the last three years.
This signals that the housing market may have peaked, said Tan Tee Khoon, PropertyGuru Singapore country manager.
Huttons senior director of data analytics Lee Sze Teck attributes the lower volume to uncertainties among sellers and buyers, thanks to repeated delays in Build-To-Order (BTO) launches and HDB’s new framework for these flats.
Under the framework, public housing estates will no longer be classified as “mature” and “non-mature”. Instead, HDB will designate flats as Standard, Plus or Prime, depending on their locational attributes.
“Some buyers have decided to sit on the fence, awaiting more clarity in the market before committing,” he said. “(Others) are erring on the side of caution in view of the economic uncertainties and high-for-longer interest rates.”
This pullback from buyers and sellers resulted in a smaller-than-expected transaction volume in Q3, even though the third quarter is typically one of the busiest periods for the public housing resale market, Lee noted.
Among HDB unit types, five-room and executive flats accounted for a smaller proportion of total sales in Q3.
The proportion of five-room flats dipped by 2.5 percentage points to 22.9 per cent, and that of executive flats fell 1.5 percentage points to 5.8 per cent. “(This) indicates that demand for bigger flats was probably affected by the 15-month wait-out period imposed on private homeowners purchasing HDB resale flats,” said Sun of OrangeTee & Tie.
Meanwhile, demand for four-room flats remained resilient, since they are more affordable and still large enough to accommodate a small family, said ERA’s Lim.
Those aged above 55 are exempted from the 15-month waiting period if they buy a four-room flat after downsizing from their private property, he said.
In Q3, there was a “substantial increase” in the number of million-dollar HDB resale flats too, noted Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors.
There were 128 million-dollar deals in the third quarter, 24.3 per cent more than the 105 deals recorded in the previous quarter. This puts the number of such deals for the first nine months of 2023 at 336.
“Considering an estimated 35 deals in October, the year-to-date total has already reached 371, surpassing the previous high of 369 transactions in 2022,” he added.
Of the 128 deals, the lion’s share, at 117, were for flats in mature estates. Some 43.2 per cent of all deals were for five-room flats.
“This trend highlights the ongoing demand for larger living spaces, especially among buyers looking for more spacious accommodation,” said Sandrasegeran, “and this serves as a driving force behind the increasing occurrence of million-dollar deals in the HDB resale market”.
On the rental market front, there were 57,797 HDB flats rented out as at the end of Q3, an increase of 1.7 per cent from Q2.
HDB approved 9,852 applications to rent out the flats, a marginal 0.1 per cent increase quarter on quarter, and 20.3 per cent rise year on year.
Based on HDB’s latest data, the highest median rental price was S$4,500, for a five-room flat in Queenstown; the lowest median rental price was S$2,300, for two-room flats in Woodlands and Sembawang.
In December, HDB will offer about 6,000 BTO flats in Bukit Panjang, Jurong West, Woodlands, Bedok, Bishan, Bukit Merah and Queenstown. The available supply of sale of balance flats (SBF) will be consolidated, with the next SBF exercise in 2024.
HDB added it has launched around 16,700 flats thus far, and remains on track to launch up to 23,000 flats in 2023.
Market watchers expect resale volumes to dip to between 26,000 and 27,000 units for the whole of 2023, as home supply ramps up across the island. In 2022, there were 27,896 resale units transacted.
While resale prices are likely to moderate with more gradual quarter-on-quarter growth, PropertyGuru’s Tan expects prices to remain buoyant due to buyers’ preference for larger flats. “The phenomenon of million-dollar flats is indicative of this and is likely to persist.”
Overall, prices are predicted to range between 5 per cent and 6 per cent in 2023, easing from the double-digit increases of 2021 and 2022, said Wong of PropNex.
Mak from Mogul.sg believes prices will not contract next year, but would go up by 4 per cent to 6 per cent, unless a serious economic recession occurs.
https://www.businesstimes.com.sg/property/hdb-resale-prices-13-q3-growth-easing-amid-cooling-measures-economic-headwinds
Oct 27, 2023
RESALE prices of public housing flats are finally starting to moderate, following several waves of cooling measures and ongoing economic uncertainty, said analysts.
Data from the Housing and Development Board (HDB) showed that prices of resale flats inched up 1.3 per cent in the third quarter of this year – a notch higher than the earlier estimated 1.2 per cent released on Oct 2.
This followed a 1.5 per cent hike in Q2. The rise in Q3 also remained below the average quarterly growth of 2.5 per cent in 2022, noted Eugene Lim, ERA key executive officer.
For the first nine months of 2023, resale prices rose by 3.8 per cent – less than half the 8 per cent growth in the same period a year ago.
Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, pointed out that even though this is the 14th straight quarter of growth, the increases this year are “noticeably slower” than those of previous years, being consistently below 2 per cent per quarter.
In comparison, quarterly price growth was above 2 per cent for each quarter in 2022 and above 2.9 per cent for each quarter in 2021.
“The trends indicate that the cooling measures and the increased housing supply are effective in taming price hikes,” she said.
The slowing economy and weaker job market also mean that there is weaker upgrading demand among some homebuyers, said Nicholas Mak, chief research officer at Mogul.sg.
Meanwhile, transaction volumes of resale flats rose 2.8 per cent in Q3 to 6,695 units, from the 6,514 units in the previous quarter. Year on year, this was an 11.3 per cent decline. The resale volume was the lowest recorded in the third quarter over the last three years.
This signals that the housing market may have peaked, said Tan Tee Khoon, PropertyGuru Singapore country manager.
Huttons senior director of data analytics Lee Sze Teck attributes the lower volume to uncertainties among sellers and buyers, thanks to repeated delays in Build-To-Order (BTO) launches and HDB’s new framework for these flats.
Under the framework, public housing estates will no longer be classified as “mature” and “non-mature”. Instead, HDB will designate flats as Standard, Plus or Prime, depending on their locational attributes.
“Some buyers have decided to sit on the fence, awaiting more clarity in the market before committing,” he said. “(Others) are erring on the side of caution in view of the economic uncertainties and high-for-longer interest rates.”
This pullback from buyers and sellers resulted in a smaller-than-expected transaction volume in Q3, even though the third quarter is typically one of the busiest periods for the public housing resale market, Lee noted.
Among HDB unit types, five-room and executive flats accounted for a smaller proportion of total sales in Q3.
The proportion of five-room flats dipped by 2.5 percentage points to 22.9 per cent, and that of executive flats fell 1.5 percentage points to 5.8 per cent. “(This) indicates that demand for bigger flats was probably affected by the 15-month wait-out period imposed on private homeowners purchasing HDB resale flats,” said Sun of OrangeTee & Tie.
Meanwhile, demand for four-room flats remained resilient, since they are more affordable and still large enough to accommodate a small family, said ERA’s Lim.
Those aged above 55 are exempted from the 15-month waiting period if they buy a four-room flat after downsizing from their private property, he said.
In Q3, there was a “substantial increase” in the number of million-dollar HDB resale flats too, noted Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors.
There were 128 million-dollar deals in the third quarter, 24.3 per cent more than the 105 deals recorded in the previous quarter. This puts the number of such deals for the first nine months of 2023 at 336.
“Considering an estimated 35 deals in October, the year-to-date total has already reached 371, surpassing the previous high of 369 transactions in 2022,” he added.
Of the 128 deals, the lion’s share, at 117, were for flats in mature estates. Some 43.2 per cent of all deals were for five-room flats.
“This trend highlights the ongoing demand for larger living spaces, especially among buyers looking for more spacious accommodation,” said Sandrasegeran, “and this serves as a driving force behind the increasing occurrence of million-dollar deals in the HDB resale market”.
On the rental market front, there were 57,797 HDB flats rented out as at the end of Q3, an increase of 1.7 per cent from Q2.
HDB approved 9,852 applications to rent out the flats, a marginal 0.1 per cent increase quarter on quarter, and 20.3 per cent rise year on year.
Based on HDB’s latest data, the highest median rental price was S$4,500, for a five-room flat in Queenstown; the lowest median rental price was S$2,300, for two-room flats in Woodlands and Sembawang.
In December, HDB will offer about 6,000 BTO flats in Bukit Panjang, Jurong West, Woodlands, Bedok, Bishan, Bukit Merah and Queenstown. The available supply of sale of balance flats (SBF) will be consolidated, with the next SBF exercise in 2024.
HDB added it has launched around 16,700 flats thus far, and remains on track to launch up to 23,000 flats in 2023.
Market watchers expect resale volumes to dip to between 26,000 and 27,000 units for the whole of 2023, as home supply ramps up across the island. In 2022, there were 27,896 resale units transacted.
While resale prices are likely to moderate with more gradual quarter-on-quarter growth, PropertyGuru’s Tan expects prices to remain buoyant due to buyers’ preference for larger flats. “The phenomenon of million-dollar flats is indicative of this and is likely to persist.”
Overall, prices are predicted to range between 5 per cent and 6 per cent in 2023, easing from the double-digit increases of 2021 and 2022, said Wong of PropNex.
Mak from Mogul.sg believes prices will not contract next year, but would go up by 4 per cent to 6 per cent, unless a serious economic recession occurs.
https://www.businesstimes.com.sg/property/hdb-resale-prices-13-q3-growth-easing-amid-cooling-measures-economic-headwinds