The doubling in housing grants given to resale flat buyers led to the quickening in HDB resale prices growth to 1.5% in 2Q 2023. While this is faster than the 1% growth seen in 1Q 2023, it is still lower than the quarterly average of 2.5% in 2022. This points to moderation in price growth which may have come about due to HDB ramping BTO supply, price resistance from buyers, lowering of loan-to-value ratio to 80% and 15-month wait-out period for private property owners downgrading to a HDB flat.
As of 2Q 2023, the HDB resale price index has gained 33.6% since the circuit breaker in 2Q 2020 and is 17.9% above the last peak in 2Q 2013.
Figure 1: HDB Resale Price Index
Source: HDB, Huttons Data Analytics as of 28 Jul 2023
21 out of 26 HDB towns saw price gains in 2Q 2023 compared to the previous quarter where only 12 towns had price increases. Resale flats in Geylang had the biggest increase of 18.7%, followed by the Central Area 8.6% and Bedok 4.3%.
Among the HDB towns which had seen a decline in prices in 2Q 2023, resale flat prices in Bukit Timah have contracted for 2 quarters. Possible reasons may include the lack of new supply and ageing stock of resale flats.
Transaction volume of resale flats was 6,514 flats in 2Q 2023, 6.7% lower than 1Q 2023 and 4.6% lower year-on-year. While the grants gave buyers a boost in their housing budget, there is still a price mismatch between sellers and buyers leading to lower transaction volume. Some buyers were lured to the BTO market as the HDB increased the supply of flats with shorter waiting time.
The top 5 most popular HDB towns among buyers in 2Q 2023 are Punggol, Woodlands, Sengkang, Yishun and Bukit Batok. They accounted for around 37.4% of total transactions in 2Q 2023. The average prices of a 4-room flat in the top 5 most popular towns are shown below.
Figure 2: Top Five most popular HDB Towns among buyers in 2Q 2023
Source: HDB, Huttons Data Analytics as of 28 Jul 2023
Figure 3: Prices of 4-room flats in Top Five HDB Towns in 2Q 2023
Source: HDB, Huttons Data Analytics as of 28 Jul 2023
Based on data.gov.sg, there were an estimated 105 million-dollar flat transactions in 2Q 2023, slightly more than the previous quarter of 103 million-dollar flats. This made up an estimated 1.6% of total transaction volume in 2Q 2023.
It is worth noting that the prices of resale executive flats are lower than the 4- and 5-room flats despite their larger sizes. It could be due to the resale executive flats being further from transportation nodes, age and unique attributes of 4- and 5-room flats such as DBSS.
Figure 4: Location of Million-Dollar Flats in 2Q 2023
| HDB Towns | Flat Type | Volume | Price Range |
|---|---|---|---|
| Ang Mo Kio | 5-room | 3 | $1,018,000-$1,155,000 |
| Bedok | 5-room | 2 | $1,000,000-$1,028,000 |
| Bedok | Executive | 3 | $1,000,000-$1,110,888 |
| Bishan | 4-room | 2 | $1,088,000-$1,090,000 |
| Bishan | 5-room | 1 | $1,400,000 |
| Bishan | Executive | 8 | $1,010,000-$1,270,000 |
| Bukit Batok* | Executive | 2 | $1,008,888-$1,088,000 |
| Bukit Merah | 4-room | 3 | $1,000,000-$1,500,000 |
| Bukit Merah | 5-room | 9 | $1,020,000-$1,278,000 |
| Bukit Timah | Executive | 1 | $1,210,000 |
| Central Area | 4-room | 12 | $1,000,000-$1,400,000 |
| Central Area | 5-room | 1 | $1,400,000 |
| Clementi | 5-room | 5 | $1,000,000-$1,240,888 |
| Geylang | 5-room | 2 | $1,058,000-$1,105,000 |
| Jurong East* | Executive | 1 | $1,018,000- |
| Kallang/Whampoa | 4-room | 7 | $1,010,000-$1,100,000 |
| Kallang/Whampoa | 5-room | 5 | $1,170,000-$1,262,000 |
| Kallang/Whampoa | Executive | 4 | $1,000,000-$1,050,000 |
| Marine Parade | 5-room | 3 | $1,000,000-$1,038,888 |
| Pasir Ris | Executive | 1 | $1,000,000 |
| Queenstown | 4-room | 4 | $1,000,000-$1,092,000 |
| Queenstown | 5-room | 5 | $1,030,000-$1,250,000 |
| Queenstown | Executive | 1 | $1,260,000 |
| Tampines | Executive | 1 | $1,025,000 |
| Toa Payoh | 4-room | 4 | $1,000,000-$1,020,000 |
| Toa Payoh | 5-room | 9 | $1,008,000-$1,420,000 |
| Toa Payoh | Executive | 2 | $1,050,000 |
| Woodlands* | Executive | 2 | $1,000,000-$1,060,000 |
| Yishun* | Executive | 2 | $1,050,000-$1,051,800 |
* non-mature estates
Source: HDB, Huttons Data Analytics as of 28 Jul 2023
While a record of $1.5 million was set for an adjoined flat at Moh Guan Terrace, there appeared to be a reluctance among buyers to pay $1.1 million and more for a HDB flat. More million-dollar flat transactions are in the range of $1 million to $1.1 million in 2Q 2023. Buyers may be rationalising paying a high price for a HDB flat and more have opted for 4-room flats with the proportion hitting a high of 30.5% in 2Q 2023 compared to 21.4% in 1Q 2023. The cooling measures in Sept 2022 may have also caused this shift in demand to 4-room flats. Furthermore these four room flats tend to be younger with an average age of 10.9 years compared to 17.9 years for 5-room flats and 31.5 years for executive flats in 2Q 2023.
Figure 5: Breakdown of Million-Dollar Flats by Price Range
Source: HDB, Huttons Data Analytics as of 28 Jul 2023
Market Outlook
With more BTO flats completing in the coming months, there may be more supply of resale flats for sale as owners making a lateral move to a BTO flat will need to sell off their current flat. The increase in the number of private residential launches may see more HDB upgraders opting to sell their flats first so that they do not need to pay the 20% ABSD upfront.
HDB will launch around 13,000 BTO flats in Sep and Dec 2023. The penalties on non-selection of flats by applicants from Sep 2023 BTO may divert some demand to the resale market. However, there are some attractive BTO projects in mature estates and possibly some BTO projects with a shorter construction period in Sep BTO launch. This may siphon away some resale demand and there may not be any noticeable change in resale demand.
This increase in both BTO and resale flat supply may moderate prices in HDB resale flats to not more than 5% in 2023. HDB resale flat transactions are estimated to be in the range of 24,000 to 26,000 in 2023.