HDB resale rose at a slower than 1% pace during 4th quarter

Many experts predict the number of homebuyers will remain high, as they seek out more desirable locations. Property owners who wish to “downgrade”, or have come to the end of the waiting period of 15 months imposed on them last year and want to sell their property, could also be starting to appear in the resale industry and can afford to pay a higher price.

Resale prices for different flat types have grown at a slower pace. In Q4 prices rose by less that 1 per cent compared to the previous quarter.

The average price of four-room flats rose by S$594,212 (0.7%) in Q4 2020. Three-room and five room flats also saw a 0.6-percent increase, respectively.

In the fourth quarter, resale was down 2.3% on the previous quarter.

The rescheduling Build-To-Order launch of BTO flats from August into October and then December probably diverted a lot of attention away for the resale industry.

BTO launches during Q4 saw a total of 12 857 BTO flats being offered to approximately 24,346 candidates

Housing and Development Board HDB (HDB) resale property prices rose in the last three months of 2023.

HDB published flash figures on Tuesday that showed the Q4 price growth to be lower than 2022’s average quarterly rate of growth, which is 2.5 per cent.

The total increase of 4.8 percent was considerably less than that of 10.4 percent in 2022 and 12.7% in 2021.

There could be implications from the reclassification BTO apartments into Standard, Plus and prime starting in 2024. Plus and Premier flats come with resale restraints, a prolonged minimum occupation period (MOP), and subsidy clawbacks.

Some buyers could have been tempted by the BTO flats even before these new changes come into effect.

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Up to the end of 2023 the total resale value was 26628, down 3.8 percent from the 27686 recorded the year prior.

Resale flats were in greater demand during Q4 of 2023 as more homeowners who moved to new homes started to put up their flats on the market.

HDB announced that the median rates of first-time applications for BTO flats larger than three rooms have dipped. The median application rates for the first-timers of three-room apartments fell to 0.9% during Q4 2023’s sales launches and to 0.8% for bigger units. The rate of first-time buyers in three-room flats ranged from 0.8 to 0.9 during the pandemic phase (2020 to 2022).

HDB offers around 4100 flats for sale in Bedok (Queenstown), Queenstown (Choa Chu Kang), Hougang (Punggol), and Woodlands.

OrangeTee & Tie estimated that up to an extra 37,000 flats will be launched by government to meet a target supply of 100 flats in the period 2021-2025. And this could cause resale demand to decrease. Over 63,000 BTOs flats have sold from 2021-2023.

Despite increased competition from BTO, a significant decline in resale rates is unlikely in near-term. The lack of MOP flats in certain areas will help support prices.

The number if flats which have reached the five-year MOP mark and may be eligible for resale has dropped from 30,920 to 15,549 by 2023. The MOP supply will continue to decline in 2024. It is estimated to be 11,952 units.

Resale flats in mature estates are seeing resilient demand. Resale apartment supply is limited and units are quickly sold once they hit the market.

The number of flats being offered for sale is increasing in the older estates. However, some units may take much longer to be sold.

Bukit Meraih, Toa Payoh & Kallang/Whampoa accounted for the largest number of HDB flats worth over a million dollars. Huttons reported that 36.5 per cent million-dollar apartment transactions will take place in these towns by 2023.

HDB launched 22,780 BTO Flats for sale in the year 2023. The total number of units launched was 24,447. This includes 1,500 units for the Sale of Balance Flats as well as 167 flats that were offered in its open-booking exercise.

“The implementation various cooling measures on September 20,22 has taken away the wind and HDB Resale Prices have now grown at a slower rate, with the price growth quarterly never having crossed the 2% mark by 2023.

This is a significant trend, as the average price increase in each quarter between Q4 of 2020 and Q4 of 2022 was over 2 or 3%.

HDB’s resale prices are soaring due to the large number of HDB flats which have sold for more than seven figures.

According to him, the first-time buyer and HDB upgraders who are looking for private homes but have been priced out due to a post-pandemic housing market demand these “million dollars” flats.

These buyers searched for private homes that were larger than 1,000 sq. ft. There were no signs that private home prices would drop or that interest rates would decrease. Therefore, these property buyers looked to resale apartment buildings, which offered great value.

PropNex’s data indicated that 134 resale condos were transacted for a minimum of S$1,000,000 per quarter during the 4th quarter, bringing the total for the year 2023 up to 470. This is 26.8 % more than 2022’s 369 transactions.

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