Huttons’ comments on HDB 4Q 2023’s flash estimates

2 January 2024

The HDB resale market was slower in 4Q 2023 largely due to the year-end lull and the BTO launches of more than 12,000 flats in October and December. There were 6,440 resale transactions in 4Q 2023, 2.3% lower than the previous quarter. For the full year, resale volume was 26,628, 3.8% lower than the same period a year ago.

Some demand shifted to BTO flats with a shorter waiting time. For example, the Bishan BTO is probably the first BTO in a mature estate with a waiting time of less than three years and attracted almost 2,500 applicants for the 732 flats.

The impending changes to the classification of BTO flats to Prime, Plus and Standard from 2H 2024 resulted in an increase in interest in resale flats without the PLH restrictions.

Buyers viewed such flats without the PLH restrictions as a rare asset in the future and may potentially have better capital appreciation hence are willing to buy them now. However sellers are also aware of the advantage their existing flats in mature estates have and are holding out for their ideal price.

There was also an increase in the supply of resale flats in 4Q 2023 as more owners moving to their new homes started to put up their flats for sale. Together with the various policy changes such as a wait-out of 15 months for private property owners and lowering of LTV to 80%, this led to more stabilisation in prices of resale flats to 1.0% in 4Q 2023. For 2023, HDB resale prices had grown by 4.8%, much lower than the 10.4% increase in 2022.

Despite prices of resale flats stabilising in 2023, the number and prices of million-dollar flats continued to reach new highs in 4Q 2023.

Data downloaded on 2 Jan 2024 from data.gov.sg showed that an estimated 468 HDB flats were sold for a million dollars or more in 2023. This is about 26.8% higher than 2022’s 369 transactions.

A 4-room flat at Pinnacles@Duxton was sold for a record $1,409 psf in December 2023.

The top 3 HDB towns with the greatest number of million-dollar flats in 2023 were Bukit Merah, Toa Payoh and Kallang/Whampoa. These 3 HDB towns accounted for 36.5% of million-dollar flat transactions in 2023.

There may be more private residential projects launched for sale in 2024. HDB upgraders who do not want to pay ABSD on the second residential property are likely to sell their HDB flats. There may be more owners putting up their existing homes for sale as they collect the keys to their new place in 2024.

HDB is likely to maintain a constant supply of BTO flats in 2024 to provide affordable and accessible housing options. In February, around 4,100 BTO flats in Bedok, Queenstown, Choa Chu Kang, Hougang, Punggol and Woodlands will be launched for sale.

In 2024, Huttons Data Analytics estimate HDB resale volume to be between 25,000 to 27,000 while resale flat prices are likely to stabilise in the range of 3% to 5%.