SINGAPORE – Housing Board upgraders’ love affair with private property cooled in the first half of this year following the Dec 16 round of property curbs and higher mortgage rates.
Fewer HDB flat owners bought private property even as HDB resale flat prices gained 5.3 per cent in the first half compared with a 4.2 per cent rise in private home prices.
Some 3,649 new and resale non-landed private homes were bought by those with HDB addresses in the first half this year, down 26.2 per cent from 4,942 in the same period last year, said property consultancy JLL, citing transactions recorded in the Urban Redevelopment Authority’s (URA) Realis database.
Private homes valued at up to $1.5 million were the most popular among HDB upgraders and accounted for 80 per cent of this group’s transactions in 2019.
But by the first half of this year, the proportion had fallen to 62 per cent, from 70 per cent in first half of 2021, JLL senior director for research and consultancy Ong Teck Hui noted.
Local buyers may have been deterred by the jump in the additional buyer’s stamp duty (ABSD) rate from 12 per cent to 17 per cent for those buying their second residential property.
“Some may have difficulty paying the ABSD upfront even if they are able to get the ABSD remission after selling their flats,” OrangeTee & Tie senior vice-president of research and analytics Christine Sun said.
Even more pronounced is the drop in new non-landed private home sales to those with HDB addresses.
A mere 975 new non-landed private homes were transacted in the first two quarters this year, less than half of the 2,012 units sold in the same period last year.
Analysts cited an unprecedented drop in new home launches in the first half of this year.
JLL said the 2,569 new private homes launched were an 18-year low as developers were highly cautious in the immediate aftermath of the new curbs.
Some buyers may also have been priced out as the gap between the median transacted price of HDB resale flats and that of new non-landed private homes widened to $1.39 million in the first half of this year, from $1.088 million in 2021 and $911,000 in 2020, according to data from PropNex.
In 2017, the price differential was $790,000.
Higher land and construction costs fuelled the jump in new launch prices, Ms Wong Siew Ying, head of research and content at PropNex Realty, said.
“The widening gap means that new non-landed private homes have become more expensive for some. Those with a limited budget may have been priced out of buying larger units, or (units) in very prime locations,” she said.
But she believes that demand from HDB upgraders may increase as more new suburban launches hit the market in the second half of the year.
Meanwhile, there is also a growing, albeit smaller, proportion of buyers with HDB addresses snapping up pricier private homes in the $1.5 million to $3 million range, due to the strong resale market and more HDB households doing well financially, analysts said.
Million-dollar flat sales accounted for 1.3 per cent of total HDB resale transactions, up from 0.8 per cent a year ago, PropNex said.
As at Wednesday (Aug 24), 228 resale flats sold for at least $1 million this year, up from 151 from January through Aug 31, 2021. If the momentum continues, new records could be set this year, surpassing the 259 sold last year, PropNex said.
Among private residential transactions attributable to buyers with HDB addresses in the first half of this year, those in the $1.5 million to $2 million price range accounted for 23 per cent of the transactions, up from 21 per cent a year ago, Mr Ong said.
Transactions at $2 million and above accounted for 15 per cent, up from 9 per cent a year ago.
For HDB upgraders with tighter budgets, the private resale market may offer more affordable options.
The price gap between HDB resale flats and non-landed private resale homes has narrowed to $854,000 in the first half of this year, from $988,000 in 2019, suggesting that there are buying opportunities in the private resale market, PropNex said.
The narrowing differential is due to median prices of HDB resale flats jumping 6 per cent in 2020 and 14 per cent in 2021, and continuing to rise in the first half of this year to $514,888, while the median price of non-landed private resale remained flat at $1.37 million, Ms Wong said.
“Source:[Drop in appetite for private homes among some HDB owners] © Singapore Press Holdings Limited. Permission required for reproduction”
