SINGAPORE – Median resale Housing Board flat prices have been rising steadily in the past four years, even outpacing the growth in median resale and new private home prices in 2020 and 2021, analysts say.
But that growth spurt slowed in 2022 and 2023 as some price resistance set in, and after cooling measures were introduced in September 2022.
These included tighter HDB loan restrictions, and the imposition of a 15-month wait-out period for private home owners after the sale of their current home before they can buy an HDB resale flat without housing grants.
Nonetheless, median resale flat prices posted a 9.2 per cent jump to $499 per sq ft (psf) in 2022 and a 6.2 per cent rise to $530 psf in 2023 – a reversal of six straight years of declining prices from 2014 through 2019 due to previous rounds of cooling measures in 2013, according to PropNex Research.
Median resale flat prices dropped from $454 psf in 2013 to a low of $388 psf in 2019, before rebounding 4.4 per cent to $405 psf in 2020 on a sharp uptick in HDB resale transactions, following pandemic-related construction delays in Build-To-Order (BTO) projects.
This was followed by a 12.8 per cent jump to $457 psf in 2021, according to PropNex.
In comparison, median resale condo prices rose just 1 per cent in 2020 and 7.5 per cent in 2021.
Fuelling the resale flat price rebound was a jump in HDB resale transactions, from 23,714 flats in 2019 to 24,748 units in 2020, and then to 31,017 flats in 2021.
This came as buyers switched from buying BTO flats to the resale market and as some condo owners cashed in on a run-up in private home prices and downgraded to resale flats, analysts said.
Several policies had also been introduced before the pandemic to help the public housing market, including allowing buyers to use more of their Central Provident Fund to buy resale flats.
But in the past two years, median prices of non-landed, 99-year leasehold resale condos, and particularly those of new private homes, have moved at a faster clip than those of HDB resale flats, even with three rounds of cooling measures in December 2021, September 2022 and April 2023.
Median resale condo prices jumped 11.1 per cent to $1,349 psf in 2022 and were up 10.7 per cent to $1,493 psf in 2023, supported by robust new condo prices and as some switched to buying resale condos instead of HDB flats due to the 15-month wait-out period.
New private home prices posted bigger gains over the same period. These jumped 20.4 per cent to $2,145 psf in 2022 from $1,782 in 2021, and were up 12.6 per cent to $2,415 psf in 2023, due to a lack of new private home supply, especially in the suburbs, higher financing costs, as well as land and construction costs.
With the Government stepping up new BTO supply and launching more HDB flats with shorter waiting times of less than three years from 2024, the growth in median resale flat prices could slow further, said Ms Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie.
Ms Wong Siew Ying, PropNex’s head of research and content, said that while HDB flat owners were heartened to see resale flat prices rise in the past four years, resale private home prices have also climbed steadily, potentially limiting the range of viable options for HDB upgraders.
That said, a growing number of resale flats have transacted at above the $1,000 psf benchmark, especially in the past two years.
This is significant as non-landed, new condo prices in the suburbs – a popular sub-market with HDB upgraders – have surged past the $2,000 psf benchmark in the same period, analysts noted.
“In the past, only condos were sold at above $1,000 psf. Therefore, it is significant that the $1,000 psf benchmark or ‘psychological barrier’ for resale flats has been crossed,” Ms Sun said.
“The price trend for private homes can influence HDB resale prices. If private home prices continue to rise, it is very likely that the HDB resale prices will trend higher to catch up,” she added.
Ms Sun noted that several four-room and five-room resale flats in Bishan, Bukit Merah, Dawson, Henderson Road and Toa Payoh were hitting between $1.1 million and $1.5 million as these are located near the city centre and Orchard Road. “In comparison, three-bed to four-bed new condos in those areas can cost more than $2.5 million,” she said.
According to PropNex, the first transaction that crossed $1,000 psf was a four-room flat in Boon Tiong Road in Bukit Merah in September 2018.
That flat, which sold for $1,017 psf (about $1.02 million) based on a floor area of 1,001 sq ft, was among six units in Boon Tiong Road and Cantonment Road that each sold for more than $1,000 psf that year.
Since 2018, more than 510 resale flats have been sold at more than $1,000 psf, but overall, these account for a fraction of total resale transactions, said PropNex.
“Only a handful of units in attractive locations with strong attributes, and spacious unit sizes can fetch such prices,” Ms Wong said, adding that 270 such transactions in 2023 represented just 1.1 per cent of the overall resale HDB flat volume.
For instance, of the 270 transactions, 77 per cent or 208 are four-room or smaller flats and 41 per cent or 112 units were located between the 31st and 51st storeys, she noted. These flats are located in Ang Mo Kio, Bishan, Bukit Merah, the Central area, Kallang Whampoa, Queenstown and Toa Payoh.
A new record was set in December when a 1,001 sq ft four-room resale HDB flat in Cantonment Road – located between the 46th and 48th storeys – was sold for $1,409 psf ($1.411 million), according to PropNex.
When the first batch of private home downgraders have served their 15-month wait-out period in early 2024, it will be interesting to see if there are more transactions of resale HDB five-room and executive flats, and what prices they transact at, Ms Sun said.
“Source:[HDB resale prices rising in past 4 years, outpacing private home price growth in 2020, 2021] © Singapore Press Holdings Limited. Permission required for reproduction”
