HDB resale rates rise at a slower, 1% rate in Q4

Bukit Merah, Toa Payoh, and Kallang/Whampoa are the HDB towns which have sold more million-dollar apartments. Huttons reports that in 2023 these towns are expected to account for 36,5 per cent of the million dollar flat transactions.

HDB will sell 22,780 BTO-flats in 2023. After including 1,500 units offered as part of the Sale of Balance Flats initiative and 167 available under HDB’s open booking of apartment, total flats launched reached 24,447.

HDB stated that first-timer median application rates have moderated for BTO units with three or more rooms. HDB said that the median first-timer application rate in flats with three rooms fell to just 0.9 at the Q4 sales launch of 2023. For larger units, it dropped to just 0.8. The rate was between 2 and 68% in the pandemic years (2020-2022).

HDB will be offering 4,100 flats to the public in Bedok Queenstown Choa Chu Kang Hougang Punggol Woodlands.

The demand for “million-dollar” apartments came from HDB upgraders as well as first-time home buyers who wanted private properties, but could not afford them in the post-pandemic real estate market.

These buyers were on the lookout for private homes over 1,000 square feet. Since there was no sign of a drop in private home prices or interest rates, many of the property seekers looked at resale properties, which are a great deal of space for comparatively low price.

The rescheduling Build-To-Order Flat Launches from August to December and October likely diverted some of the attention away from resale.

BTO launches occurred in the fourth quarter of last year, with 24,346 applicants competing to win a total number of 12,857 BTO apartment.

There may be other consequences to the reclassification BTOs as Standard or Plus from 2024’s second half. Plus and Prime apartments will be subject to restrictions on resale, as well as a longer Minimum Occupation Period (MOP), as well subsidy clawbacks.

Before these changes, some buyers may have applied for BTO apartment.

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Total resale volumes for the full year period ending Dec 28 2023 were 26,628 units, down 3.8% from 27,686 the previous year.

In Q4 2023 the overall supply of flats was up, due to more owners selling their flats as they moved into new homes.

Resale flats in mature estates are seeing resilient demand. Resale units are scarce and sold quickly when they’re put on the market.

There are fewer flats available for sale in the estates that are not mature. Some units also take longer to sell.

PropNex reported that 134 resale units were transacted at least S$1,000,000 in the fourth quarter. This will bring the total up to 470 by 2023. This is a 26.8% increase over the 369 transactions of 2022.

Experts predict that this number will remain high as homebuyers continue to seek out locations with superior amenities. Many private property owner who want to downgrade and are no longer in the 15-month period of waiting imposed by last year will start entering the resale and resale sector. They may have the money to pay higher price.

In general, the resale market prices of different types of apartments have seen modest growth. Prices rose less than one per cent from Q3 to Q4.

In Q4 2023, four-room flats accounted for the largest increase in resale value, with an average price rise of 0.7 per cent, to S$594,212. Meanwhile, three-room apartment prices rose by 0.6 percent, to S$415 491, and five-room apartment prices each rose by 0.6 per cent, to S$693,846 and S$415 491 respectively.

It was the lowest quarter volume since 2020.

OrangeTee & Tie estimates that the government could launch up to 37,000 additional flats to meet the targeted supply of up 100,000 flats by 2021-2025. Consequently, this could shift some demand off the resale marketplace. From 2021-2023, more than 63,000 BTO-flats were sold.

In the near-term, it is unlikely that the resale market will see a major drop due to the increased competition. Prices will remain stable in some areas due to the scarcity MOP flats.

The number of flats that could be resold after reaching the MOP five-year mark has decreased from 30920 units in 2020 to 15549 units in 2030. In 2024 the MOP will decrease to 11,952 apartments.

Housing and Development Board HDB resale rates continued to rise during the last quarter 2023.

HDB released flash data Tuesday (Jan. 2) showing that Q4 resale value growth was lower than average quarterly growth of 2,5 per cent for 2022.

The 4.8 percent increase was less than 10 per cent in 2022, and 12.7 percent in 2021.

“The implementations of various cooling measure in September of 2022 have taken the wind out from our sails. HDB resale values are now increasing at a much slower pace, with a quarterly price increase never ever exceeding the 2 percent mark in the year 2023.

This is an important trend because the price growth rate in each of the four quarters between Q4 2019 and Q4 2018 was more than 2 to 3 percent.

HDB resale price increases are due to HDB flats selling for seven-figure sums.

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