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

Price resistance has finally set into the HDB resale market in 3Q2023, as resale flat prices grew at a slower rate compared to the previous quarter. This is indicated by growth figures that dropped from 1.5% q-o-q in 2Q2023 to 1.2% in 3Q2023. Despite this, the price of million-dollar flats hit a record high with 128 units sold in the same quarter, as noted by Orange Tee & Tie in their October research report.

In terms of prices, four-room flats saw the biggest q-o-q growth of 1.8% from $579,740 in 2Q2023 to $589,992 in the third quarter. Similarly, executive flats grew by 1.2% q-o-q from $827,549 to $837,138. Interestingly, certain towns registered decline in resale prices, with Geylang charting the biggest fall of 3.6% q-o-q, followed by Central Area (down 3.4%), Bukit Batok (down 2%), and Sembawang (down 1.8%).

The rising cost of living and HDB loan interest rates that have stayed at an elevated level for longer than expected has contributed to the slower growth of resale flat prices. Despite this, HDB resale transaction volumes rose 2.9% q-o-q in 3Q2023 to reach 6,592 units, partially due to more grants given to first-time buyers, as well as the delay in the August BTO sales launch.

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On a year-on-year basis though, volume is still 9.7% lower than 3Q2022, which yielded 7,298 units. With regard to proportions, four and five-room flat sales dropped from 45.7% and 23.4% respectively in 2Q2023 to 43.8% and 22.9% in 3Q2023. The the proportion of buyers purchasing executive flats and two- and three-room flats increased.

Sengkang witnessed the highest volume of transactions at 504 units, followed by Punggol (499 units), Woodlands (497 units), Yishun (454 units), and Jurong West (439 units). Moving ahead, OrangeTee & Tie forecasts a full-year price growth of between 4% to 5.5% for HDB resale flats in 2023. Also, the firm predicts resale flat transactions to dip slightly to about 26,000 to 27,000 units this year.