HDB resale price growth slows, even as number of million-dollar transactions hit record high

In 3Q2023, prices for HDB resale flats grew at a slower pace, with price resistance setting into the market due to increased affordability concerns such as high interest rates, as highlighted in an October research report by Orange Tee & Tie. Prices rose 1.2% q-o-q, with four-room flats recording the biggest growth of 1.8%. Meanwhile, million-dollar flat transactions reached a record 128 units in the same quarter.

As more Singaporeans were diverted to the resale market, HDB resale transaction volumes rose 2.9% q-o-q in 3Q2023 to reach 6,592 units, albeit, on a y-o-y basis, this number is still almost 10% lower.

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OrangeTee & Tie observes that 10 towns recorded a decrease in resale prices, with Geylang charting the biggest fall of 3.6% q-o-q. On the flip side, Bukit Timah and Serangoon saw the biggest q-o-q price growths at 38.1% and 10.8% respectively.

The report also notes that the proportion of buyers going for executive flats rose from 5.5% to 5.9%, while two-room and three-room flats also saw an uptick in their respective proportions.

Looking ahead, OrangeTee & Tie believes affordability will continue to be influenced by the interest rate environment, predicting resale prices to grow at a more measured pace of 4% to 5.5% this year. Volume is expected to dip slightly to around 26,000 to 27,000 units in 2023.

In addition, more demand may be diverted to the BTO market as more flats are slated for sale. Christine Sun, senior vice president of research & analytics at OrangeTee & Tie, notes that “2023 will likely smash 2022’s full-year record of 369 units” of million-dollar flat transactions.

As of 3Q2023, Sengkang is the only town that has yet to log a million-dollar flat transaction. Sun adds that with ten units sold for at least $900,000 in the area, Sengkang could be the next town to see a million-dollar flat transaction.