HDB resale prices surged 12.5% in 2021, biggest rise since 2010: Flash data

The 12.5 per cent full-year price increase is the highest annual growth recorded since 2010. ST PHOTO: LIM YAOHUI

SINGAPORE – Housing Board (HDB) resale prices rose 12.5 per cent for the whole of 2021, climbing for the seventh consecutive quarter to fresh highs, flash estimates showed on Monday (Jan 3).

In the fourth quarter of 2021 alone, HDB resale flat prices grew 3.2 per cent, a faster pace than the 2.9 per cent increase in the previous quarter.

The 12.5 per cent full-year price increase is also the highest annual growth recorded since 2010 when prices grew by 14.1 per cent, noted Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie.

In response to the hot property market, the authorities last month introduced a set of measures to cool both private and public housing prices.

Since Dec 16, the loan-to-value (LTV) limit for housing loans from HDB has been tightened from 90 per cent to 85 per cent, among other measures.

The impact of the cooling measures will likely be reflected in figures only starting from this month onwards.

Ms Sun said the HDB resale market in 2021 has “exceeded expectations in terms of price growth and sales volume”.

Resale flat prices in the third quarter of 2021 had already exceeded the previous peak in the second quarter of 2013.

Ms Sun said there may be “limited impact” for the HDB resale market as most buyers may not be adversely affected by the tightened LTV.

“Buyers may generally be more prudent in their home purchases and could even take the opportunity to negotiate for better prices. Some sellers may start adjusting their price expectations as well,” said Ms Sun.

However, she noted that prices are not expected to fall because demand should remain robust as some Build-To-Order (BTO) projects are still plagued by construction delays.

“We anticipate that prices may continue to grow this year but at a slower pace of between 5 per cent and 8 per cent,” she said.

ERA Realty’s head of research and consultancy Nicholas Mak said he expects about 4 per cent to 8 per cent price growth in 2022 as the latest round of cooling measures has the “least effect” on the HDB resale market and does not address supply-chain issues in the construction of BTO flats.

HDB has stepped up its flat supply, with a commitment to launch up to 23,000 BTO flats per year in 2022 and 2023, to cater to the strong demand.

The board said it is prepared to launch up to 100,000 flats in total from 2021 to 2025 if needed, should demand call for it.

Next month, HDB will offer about 3,900 BTO flats in towns such as Geylang, Kallang/Whampoa, Tengah and Yishun.

In May, about 5,200 to 5,700 BTO flats in towns such as Bukit Merah, Jurong West, Queenstown, Tampines, Toa Payoh and Yishun will be on offer.

The projects are under review, and more details will be announced when ready.

Huttons Asia senior director of research Lee Sze Teck said that unless the construction delays of BTO flats are resolved, the ramped up BTO supply may not address the demand and supply imbalance in the HDB resale market, as buyers who have urgent home needs will likely turn to resale flats.

But “at some point, price resistance will set in the HDB resale market”, he said.

Mr Mohan Sandrasegeran, research and content analyst at real estate agency Ohmyhome, said it is likely the HDB resale market may see a repeat of the 2018 sales movement after the previous round of cooling measures.

He said: “We can expect transaction volumes to potentially dip in the first half of 2022 as the market readjusts to the cooling measures.

“While there may not be an immediate drop in prices, we can anticipate a modest price movement of around 2 per cent to 3 per cent in the first half of this year.”

“Source: [HDB resale prices surged 12.5% in 2021, biggest rise since 2010: Flash data] © Singapore Press Holdings Limited. Permission required for reproduction”

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