Overall resale price hike slows as buyer interest is diverted to BTOs

HDB resale prices climbed for the 14th consecutive month.

Consumers are saying no to increasing prices and this is reflected in how HDB flat resale price increases have started to slow down amidst inflationary concerns, a report by OrangeTee said.

According to flash estimates released by HDB, resale prices edged up for the 14th consecutive quarter by 1.2% in the third quarter of 2023, compared with 1.5% in the second quarter. Last quarter’s gains were below the 2.5% quarterly average in 2022 and the 3.1% quarterly average in 2021. Year-to-date, prices increased by 3.8% in the first nine months of this year, which was less than the 8% growth over the first three quarters of 2022 and the 9.1% in the first three quarters of 2021.

Q3’s price growth was largely driven by 4-room flats which saw average prices rising 1.8% quarter-on-quarter (QoQ) from $579,740 in the second quarter to $589,992 in the third quarter, based on HDB data from data.gov.sg. This was followed by executive flats, which grew by 1.2% from an average of $827,549 to $$837,138 and 2-room flats at 1% from $321,255 to S$324,315 over the same period

The dip in prices is clearly visible in 10 towns, with the biggest QoQ drop in Geylang (3.6%) and Central Area (3.4%) in Q3 2023 (Table 1). Another four towns rose 1% or less. This is in contrast to six towns showing QoQ price drops in Q2 2023.

Christine Sun, Senior Vice President at OrangeTee said that last quarter’s slower price growth for the overall market and price falls in certain towns indicate more consumers are pushing back on further price hikes. Affordability will continue to be influenced by the interest rate environment. The HDB loan packages offered by many local banks are above 3%, and not everyone qualifies to take a loan from HDB pegged at 2.6%.

“More demand may be diverted to the BTO market as more flats are slated for sale. As demand eases, prices may continue to rise at a moderate pace. The resale market may not see a repeat of the rapid price increases witnessed during the pandemic, where HDB resale prices rose by 12.7% in 2021 and 10.4% in 2022. The full-year price growth for 2023 is estimated at around 4 to 5.5%,” Sun said.

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