Final figures released as HDB resale price increase to 5.3%

The figures released by HDB revealed that flat resales prices increased in 2.8% q-o-q in 2Q2022 and grew by 2.4% growth in 1Q2022. The figures that were released were more over estimates of 2.6% flash estimate released on July 1, according to Wong Siew Ying, PropNex director of content and research. This increases the 1H2022 HDB price of resales from 5.3%.

Terra Hill land price of $1,355 psf ppr and $1,318 psf ppr, including a 7% bonus balcony area in the GFA.

According to HDB the resale flats of 6,819 were sold in 2Q2022, around 1.7% lower than the flats of 6,934 sold during the preceding quarter. Typically, transactions tend to increase in the second quarter following an ebb in the first quarter, according to Lee Sze Teck, Huttons Asia senior director of research. “This will be the third consecutive quarter that has seen a decline and indicates indications that the market is slowing down,” he adds. “It will also be the lowest sales quarter since the break in the circuit in 2Q2020.”

Based on HDB transactions for resales The median price of three, four and five-room flats for resale ranged from $368,000 to $610,000 during 2Q2022 – an increase of 1.7% to 3.0% from the median resale price in the 1Q2022 quarter of $358,000 – $600,000. “With more recently MOP flats anticipated to enter the resale marketplace in the next few months, we believe that the median price will remain solid,” says PropNex’s Wong.

The data from transactions showed that the towns that were not mature Sengkang, Punggol, Yishun, Woodlands and Jurong West were the most sought-after estates in the 2Q2022 period with more than one third of all transactions in the quarter, including several flats that recently passed the minimum occupancy period (MOP) in resales transactions, says Wong.

“The pattern of the million dollar flat has shown no sign of slowing,” says Huttons’ Lee. “They represented more than one% of all resales flat transactions and could reach 300 by 2022. There could be more large flats in non-mature estates that surpass the million dollar threshold in the coming months.”

However there is a growing number of buyers who aren’t the cost of the resale of a flat, according to Huttons’ Lee. There are a growing amount of resales that’s value is in line with the transaction value, which results in zero cash over value. “Some buyers might have made an application for BTO flats in Yishun with shorter construction times or tried their luck in the May 2022 SBF (sale of balance flats] exercise” the expert believes.

HDB flats that are resold will likely to stabilize in the 2H2022 timeframe. “Rising prices for interest and lower prices for BTO flats with a lower time to build will shift some buyers away from the resales marketplace,” according to Huttons. Buyers of the BTO flat will also be able delay their payment until the time of key payment is made, which allows buyers to take advantage of an interest rates. Huttons anticipates HDB prices for resales to rise by 10% by 2022.

PropNex On the contrary, projects a for a full-year increase between 7% between 7% and 9%. “The HDB resale market is set to record another year of solid price growth” PropNex’s Wong is in agreement. “The low supply of flats for resales helps to support prices despite the constant demand from various categories of purchasers.” This includes those who are buying their first home and want ready-built flats and buyers who are excluded from the residential market, buyers who are upgrading and seeking a larger flat, and buyers with a sale of their home and want to buy an HDB flat for sale on the second market.

“With interest rates expected to increase further and some buyers might decide to be cautious and purchase the resale of a apartment, which is typically less expensive than an individual condo,” adds Wong.

In spite of higher resales rates however, some homeowners may be reluctant to sell due to the fact that they believe that the cost of purchasing an alternative home of comparable size is high in the market today, as per Wong. “This continuous supply and demand dynamics is likely to help HDB price resales over the next few months,” she adds.