HDB resale prices rise 1.7%; private home prices up 1.5% in first quarter: Flash estimates

SINGAPORE: Prices of Housing Board (HDB) resale flats rose by 1.7 per cent in the first quarter of 2024, higher than the 1.1 per cent growth in the previous quarter.

Flash estimates released by HDB on Monday (Apr 1) also showed Q1 resale volume, up to Mar 27, had risen 5.5 per cent to 6,928 cases from 6,567 cases in the same period last year.

HDB noted that the resale market is stabilising with prices rising by 4.9 per cent in 2023, as compared to the 10.4 per cent increase in 2022 and the 12.7 per cent increase in 2021.

Among the cooling measures implemented in December 2021, September 2022 and April 2023 to promote a stable and sustainable property market were a wait-out period of 15 months before private property owners could purchase a non-subsidised HDB resale flat and the lowering of loan-to-value limit for HDB housing loans.

Property analysts attributed the HDB resale price growth in Q1 to several factors, including private property owners exiting their 15-month wait-out period before buying resale flats. 

"In January 2024, the first wave of ex-private property owners who were observing the 15-month wait-out period to buy 5-room and larger flats entered the market," said Huttons' senior director of data analytics Lee Sze Teck.

"Based on caveats lodged, the volume of 5-room and larger flats in 1Q 2024 were higher than 4Q 2023 by almost 10 per cent."  

Mr Lee noted that the stronger demand for five-room and larger flats in the first quarter saw their prices appreciate by a faster pace and pushed up the overall prices of resale flats. 

ERA Singapore CEO Marcus Chu added that the demand for resale flats in mature estates "is still going strong and as a result, some of them have achieved record selling prices".

Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc (SRI), also observed the expiration of the wait-out period may have allowed some private property sellers to enter the HDB resale market and "possibly contributing to the observed increase in resale transactions and prices".

This translated to a rise in the number of HDB resale transactions exceeding the million-dollar mark in Q1 and for the fifth straight quarter, according to property analysts.

Data by PropNex and SRI showed that there were 185 such transactions, an increase from 133 in the previous quarter.

Mr Lee also noted two 5-room flats at a Design, Build and Sell Scheme (DBSS) project in Toa Payoh were sold for more than S$1.5 million (US$1.1 million) in January - a record price.

PRIVATE PROPERTY PRICES

Private home prices in Singapore also rose 1.5 per cent in the first quarter of 2024, slower than the figure of 2.8 per cent in the previous quarter, according to flash estimates released by the Urban Redevelopment Authority (URA) on Monday. 

The volume of transactions fell by about 20 per cent on a quarter-on-quarter basis and by about 16 per cent on a year-on-year basis in Q1.

"This continues the trend of declining transaction volume, where total yearly transaction volume for 2023 was already the lowest since 2016," said URA.

Mr Lee added this is the slowest quarterly price gain since the third quarter in 2021, "pointing towards stability in the housing market".  

He said transaction volume in the first quarter of the year is lower by about 20 per cent quarter-on-quarter, largely pulled by the resale and subsale market due to the large completion of private homes in 2023. 

However, the high interest rates in the resale and subsale market are causing some buyers to "pause and see if interest rates will ease", noted Mr Lee, leading to a decline in volume by almost 30 per cent in this quarter compared to the previous quarter in 2023. 

"Prices of non-landed properties increased by 1 per cent in the first quarter of 2024 compared to the 2.3 per cent increase in the previous quarter," said URA. 

Ms Christine Sun, senior vice president of research and analytics at OrangeTee and Tie, noted that the proportion of new home sales, excluding executive condominiums (ECs), went up from 25.4 per cent in Q4 2023 to 31 per cent in Q1 2024, while resales decreased to 62.3 per cent from 65.5 per cent. 

"Therefore, price growth was still positive last quarter since new homes are usually priced higher than resale," she said. 

The prices of non-landed properties in the outside central region (OCR) increased by 0.4 per cent compared with the 4.5 per cent increase in the previous quarter.

URA said that the prices of non-landed properties in the core central region (CCR) and the rest of central region (RCR) increased by 3.1 per cent and 0.2 per cent respectively.

The previous quarter saw an increase of 3.9 per cent and 0.8 per cent decrease respectively.

OUTLOOK FOR THE REST OF 2024

Property analysts say that the launch of BTO flats later this year could draw demand away from the resale market while some believe that it may see more transactions because of it. 

HDB will offer about 6,800 Build-to-Order (BTO) flats in Jurong East, Kallang/Whoampoa, Queenstown, Tampines, Woodlands and Yishun in June.  

"We anticipate that the June BTO sale launch could draw demand away from the resale market," said Mr Chu. 

"This is so as the June BTO sales launch largely focuses on popular mature estates and it will be the final sales launch before the reclassification of flats to prime, plus, and standard flats."

However, Mr Lee said the resale market may see more transactions as unsuccessful applicants for the sole Sale of Balance Flats (SBF) exercise in 2024 may turn to the resale market. 

"There will be more mass market launches for the rest of 2024 and HDB upgraders might sell their flats so that they do not need to pay ABSD (additional buyer’s stamp duty)," he added.

Analysts, however, expect the HDB resale market to "remain stable" this year. Mr Lee said resale flat prices are likely to stabilise in the range of 3 per cent to 5 per cent in 2024, while PropNex's head of research and content Wong Siew Ying added they are projected to rise at 5 per cent to 6 per cent.

For private property prices, analysts expect prices to increase at a steady rate. 

“We foresee a resurgence in buyers’ interest with several highly anticipated new home launches scheduled over the next few months," said Mr Chu, noting that forecasted interest rate cuts could also help uplift buyers’ interest in the second half of the year. 

Similarly, Ms Sun said she expects prices to grow at a steady rate at around 3 per cent to 6 per cent this year as new home demand "may remain resilient as more projects are slated for launch" in the second quarter of 2024. 

"If interest rates moderate in the upcoming months, buying sentiment may pick up in the second half of this year. As mortgages become more affordable and financial costs improve, home buyers may feel more motivated to purchase or upgrade their homes," she added.

"Domestic mortgage rates are expected to remain at levels that are elevated relative to the low levels seen over the past decade," said HDB, adding that the economic outlook is "subject to uncertainties", like ongoing geopolitical conflicts.

"The government will continue to monitor the property market closely and adjust its policies as necessary to promote a stable and sustainable property market."