Award Banner
Award Banner

HDB resale prices up for 6th straight month - are million-dollar flats to blame? Analysts weigh in

HDB resale prices up for 6th straight month - are million-dollar flats to blame? Analysts weigh in
A five-room unit at Block 9A Boon Tiong Road in Tiong Bahru changed hands for $1.45 million, making it the most expensive flat sold in March.
PHOTO: Google Maps

One of the reasons why prices of Housing Board resale flats have headed up north - for the sixth straight month - is the rising number of million-dollar flat transactions, some property analysts have said.

On Monday (April 8), flash data from real estate portals Singapore Real Estate Exchange (SRX) and 99.co showed that prices of flats in the resale market were up by 0.3 per cent in March.

The overall price increase is 6.2 per cent from the same time last year.

Similarly in March, some 61 flats changed hands for at least $1 million, some 22% increase from the 50 million-dollar?transactions in February.

Eugene Lim, key executive officer at ERA Singapore, told AsiaOne that the rising number of million-dollar flat transactions has helped to lift resale prices across the board.

Of the million-dollar HDB resale flats sold in March, 19 were four-room units, 24 were five-room flats, 16 were executive apartments, and two were multi-generation flats.

Most of them were in mature estates such as Toa Payoh, Kallang/Whampoa, Bukit Merah and Clementi, while nine were in non-mature estates Bukit Panjang, Yishun, Jurong East and Hougang.

Lim said that he expects to see more million-dollar flat transactions in 2024, particularly in the mature estates.

"Some of the existing flats there may fall under the upcoming 'prime and plus' reclassification and will not be subjected to the stringent resale rules", he said. "This makes them more appealing to buyers."

Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc, believes that buyers in search of spacious living spaces are expected to remain key drivers to such million?dollar?transactions, thus?bumping up resale prices.?

He noted that 41.1 per cent of the 185 million-dollar transactions in the first quarter of 2024 were for five-room flats.

Luqman Hakim, chief data officer at 99.co, told AsiaOne that the 61 flats that have changed hands for at least $1 million in March is not a significant number, considering it represents only three per cent of the total resale transactions in that month.

But he observed that the proportion of million-dollar flats have risen from 50 of such transactions in February.

What are the other reasons driving resale flat prices??

The decision to reduce the number of Build-to-Order (BTO)?sales exercises - from four to three per year - is another reason behind the recent rise in resale prices, said Luqman.

"The price increase can be attributed to demand from first-time buyers seeking the ready-to-move-in homes instead of waiting for BTO sales launches," he added.

HDB had said earlier this year that with three BTO launches instead of four, home buyers can look forward to a bigger housing supply at each launch. And?this will enable them to select from a wider range of flats and locations.

Lim?said that the resale flat price hike is also due to the 15-month wait-out period that private home owners have to serve after selling their homes in order to enter the HDB resale market.

The wait-out period is a temporary measure rolled out in September 2022 to cool the resale market.

"While these typically push up prices for HDB flats, they have a knock-on effect on the other flat owners to increase their asking price accordingly," he said.

Million-dollar flats a 'small minority': Desmond Lee

Second Minister for National Development Indranee Rajah said that flats that?have gone for more than $1 million remain a minority of HDB resale transactions.?

She added in a speech at the Huttons Gala Awards on Monday (April 8):?"Every year there are approximately 28,000 resale transactions. More than 8 in 10 first-time homebuyers are able to service their HDB loans using their CPF with little or no cash payments.

"We are committed to ensuring that HDB flats remain affordable and accessible."?

Speaking in parliament in October 2020, National Development Minister Desmond Lee said that headline-grabbing articles on HDB flats transacting at more than $1 million may have given some people the impression that there is "very, very high demand" overall and that prices are escalating significantly.

But they are in fact a "small minority" of flats that are sold in the resale market, he added.

Lee was responding to a parliamentary question by Member of Parliament Gan Thiam Poh then, who asked whether the Government plans to address "pent-up demand" seen by the record sale prices of some HDB flats in mature estates.

The minister said that HDB will continue to monitor housing affordability in the resale market.

'We are beginning to see some signs of stabilisation': Lee

At the OrangeTee annual convention on Friday (April 12),?Lee said that there have been?three rounds of property cooling measures since December 2021 and that "we are beginning to see some signs of stabilisation".

Giving some numbers, Lee pointed out that private residential property prices grew by 6.8% in 2023, down from 8.6% in 2022, and 10.6% in 2021.

HDB resale prices, on the other hand, rose 4.9% in 2023. However this is less than half of the 10.4% in 2022, and the 12.7% in 2021, he said.

Also from flash estimates, the 2.8% increase over the last six?months is the same as that in the preceding period.?

"Having said that, we will continue to keep a close watch on the situation," added Lee.

"The Government will not hesitate to move decisively but carefully, to ensure our property market remains stable and sustainable for Singaporeans, especially in light of the global macroeconomic conditions and the geopolitical situation around us."

ALSO READ:?4-room flat sold for $1.15m, breaking Toa Payoh resale record

chingshijie@asiaone.com

This website is best viewed using the latest versions of web browsers.
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news
news