HDB sales volume fell 24.1% in October, with the median price reaching a high of S$545,000: SRX, 99.co

Nov 03, 2022

According to estimates from SRX Property and 99.co, resale volumes of Housing and Development Board (HDB) flats fell 24.1 percent month on month to an estimated 1,965 transactions in October 2022, as the median price of a HDB resale flat reached a record high of S$545,000.

According to figures issued on Thursday (Nov 3) by SRX, 99.co, resale volumes in October were down 21.6 percent year on year.

According to 99 Group's head of research Pow Ying Khuan, this is the lowest resale volume recorded in October since 2017, with a decrease of 22.8 percent to 26 percent for practically all room types.

While the new data comes in the wake of new financing restrictions aimed at cooling a quickly hot public housing market, Pow observed that a HDB sale normally takes eight weeks to complete, so the impact of the Sep 30 measures has yet to be seen.

Instead, he referred to price resistance, with the median price of a HDB resale flat reaching an all-time high of S$545,000, 35% higher than its pre-pandemic level of S$405,000 in October 2019.

Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, noted that October's drop is the largest monthly drop in transaction volume since the "circuit-breaker" period in April 2020, when sales fell 78%.

By room type, four-room units accounted for 41.9 percent of October volumes, with five and three-roomers accounting for 26.1 percent and 23.7 percent, respectively. Executive flats accounted for 6.8 percent of the month's sales, with the remainder coming from other room types.

The majority of October's transactions (57.7%) were made at non-mature estates, with the remainder coming from mature estates.

The total number of transactions for the first ten months of 2022 is now 22,425. "We are expected to see fewer volumes than last year's 29,181 when the year ends," Pow added.

According to Mark Yip, CEO of Huttons Asia, some buyers may be waiting for the largest launch of built-to-order (BTO) apartments in November, when there is a "nice mix across mature and non-mature estates."

The HDB BTO launch in November 2022 will offer approximately 9,500 units in Bukit Batok, Kallang Whampoa, Queenstown, Tengah, and Yishun. In February 2023, another 2,900 to 3,900 units will be available.

According to the October flash estimates, HDB resale prices increased for the 28th straight month, albeit marginally by 0.5% from September.

Prices for three- and four-bedroom apartments increased by 0.4 and 0.7 percent, respectively. Five-room costs remained stable, while executive prices declined 1%.

Prices for resale flats in mature estates gained 1.3% from September, while prices in non-mature estates remained constant.

In October, the overall year-on-year price rise for HDB resale flats was 10.8 percent.

Prices for three and four roomers increased 10.7% and 10.6%, respectively, year on year, while prices for five-room and executive flats up 11.67% and 11.11%, respectively.

Mature and non-mature estate values climbed by 10.4% and 11.1%, respectively, year on year.

These figures, according to ERA Realty's head of research and consultancy Nicholas Mak, imply that any prospective price adjustment will most likely begin in non-mature estates. Prices for resale flats have risen 32.6 percent since the pandemic began in March 2020, compared to 24.6 percent in older estates.

He anticipates resale flat prices to rise more in the immediate term, unless Singapore's economy enters a slump.

This development, however, would be sluggish, according to Mak, because cash-over-value (COV) for HDB resale deals is projected to shrink or even disappear next year. This is due to the fact that homebuyers will have lower loan quantums, which means less cash for the COV because they will have to pay more cash for their property purchases.

Similarly, PropNex Realty's head of research and content Wong Siew Ying predicts that resale prices would climb by 9 to 10% in 2022, owing to "tight resale flat inventory, steady demand, solid financial situation of households, and enough liquidity in the market."

A five-room Design, Build and Sell Scheme unit at The Peak At Toa Payoh sold for nearly S$1.4 million at the upper end of the HDB resale market. In the meantime, an executive apartment on Yishun Avenue 4 sold for almost S$1.1 million, the highest transaction price in non-mature estates.

The number of million-dollar condos resold fell to 40 in October, down from 45 in September. Six of these flats came from the central region, as well as Toa Payoh and Bukit Merah, with four units coming from Ang Mo Kio.

According to PropNex's study, these million-dollar agreements account for 2% of monthly sales in October and around 1.4% of total HDB resale deals in the first ten months of 2022.

In October, 37.2 percent of units were resold for less than S$500,000, compared to 39 percent the previous month. In October, over 60.8 percent of resale flats sold for between S$500,000 and just under a million dollars, compared to 59.2 percent in September.

This takes the total number of million-dollar resale sales in the first ten months of 2022 to 317, up 22% from the same period in 2021.

According to Mohan Sandrasegeran, senior analyst of research and content development at One Global Group, the pace of such million-dollar acquisitions will slow, "resulting in an eventual slowing in the overall price change."