HDB resale price index rises 2.6% QoQ in Q2

This came following the improvement in buyers’ confidence, said OrangeTee.

Resale prices rose 2.6% in the second quarter of 2022, compared with the previous quarter, with the resale price index reaching 163.7, the flash estimate by the Housing and Development Board showed.

The faster price growth compared to the 2.4% in the first quarter “did not come as a surprise” as buyers’ confidence improved, according to OrangeTee.

“Our economy is almost fully reopened and growth has picked up faster than in many other countries,” it said. 

“Further, the public housing market is usually less susceptible to macroeconomic fluctuations, unlike investment properties. Critical drivers like our employment rate and income growth remain healthy, which have kept the public housing demand stable,” it added.

READ MORE: Chart of the day: SG is 53rd most affordable major housing market

Meanwhile, Huttons said the HDB resale market is “showing signs of losing momentum.”

It noted that the second quarter is the busiest month of the year, but the estimated transaction volume during the period is 6,475 flats, lower than the 6,934 flats in the previous quarter.

There is increased resistance from buyers towards paying higher prices and cash over valuation. Some demand has also leaked to the HDB May 2022 [sales of balance flats] exercise where more than 24,000 applications were received. Some buyers have chosen to apply for BTO (build-to-order) flats at Yishun which has a relatively shorter construction period of around 3 years,” it said.

Huttons added that some buyers are going after the limited supply of five-room and larger flats in the resale market which pushes the prices up, and led to more crossing the million-dollar price during the period.

In the second quarter, around 165 million dollar flat transactions were recorded, 60% higher than last year. Million-dollar flats for the year are expected to be over 300.

“The interplay of market dynamics from an increased supply of BTO flats and price resistance from buyers has worked well in stabilising the pace of price increase,” Huttons said.

It added that there will be more million-dollar flat transactions as well as more flat sales that have reached minimum occupation in the second half of 2022. Resale market prices is also expected to be more stable in the second half and may increase up to 10%.

For OrangTee, the impact of interest rates will be dependent on the loan quantum and borrowing profile of HDB owners, but most owners may not be too affected by the rate hikes as there are safeguards in place.

“All borrowers are subjected to the mortgage servicing ratio (MSR) and total debt servicing ratio (TDSR), limiting the amount of money one can borrow based on their income. As the loan quantum for most flats is not large, those who took private loans should still be able to service their mortgages,” it said.

The impact, however, “may be more keenly felt” when private loan rates reach over 3.5%.

READ MORE: HDB resale prices at an all-time high after 2.9% increase in Q32021

Upcoming sales

HDB said it will offer around 4,900 BTO flats in August in Ang Mo Kio, Bukit Merah, Choa Kang, Jurong East, Tampines, and Woodlands.

It will also offer around 9,500 BTO flats in Bukit Batok, Kallang Whampoa, Queenstown, and Yishun in November.

The number of upcoming sales is subject to review as detail will be firmed up later closer to the launch date, but HDB is on track to launch up to 23,000 new flats this year.

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