THE rise in Housing and Development Board (HDB) resale flat prices faltered as volumes fell in May after gaining ground in the months before.
Flash estimates from property portal SRX and 99.co released on Thursday (Jun 9) reported a 0.5 per cent month-on-month increase in resale prices. Although prices continued to trend upwards for the 23rd straight month, the gains paled in comparison to the 1.1 per cent month-on-month increase recorded in April.
Meanwhile, resale volumes were down 5.1 per cent to 2,156 transactions in May, from 2,273 flats resold in April. Year on year, however, resale volumes were 9.7 per cent higher.
Some demand for resale HDB flats was likely diverted to the Build-To-Order (BTO) market – which saw the launch of 5 new projects in May, noted property analysts.
The Singapore government offered more than 4,500 new HDB flats in its May BTO exercise, covering the mature estates of Bukit Merah, Queenstown, Toa Payoh and the non-mature estates of Jurong West and Yishun.
SRX and 99.co’s data showed that 4-room HDB flats dominated a majority of resale transactions in May 2022, comprising 42.4 per cent of total volume.
This was followed by 5-room units, which made up 25.3 per cent of volumes and 3-room flats, which contributed to 24.4 per cent of volumes. The rest were for executive, 1-room, 2-room and multi-gen units.
More than half (58.1 per cent) of May’s resale volume was from non-mature estates, while the remaining was from mature estates.
In terms of pricing, mature and non-mature estate prices rose by 0.6 per cent and 0.4 per cent, respectively, month on month. Executive flat prices advanced the most at 1 per cent, followed by 4-room and 5-room flats, which both rose 0.7 per cent. Three-room flat prices inched 0.2 per cent higher.
Overall resale prices were up 11 per cent on the year, with increases observed for all room types and across mature and non-mature estates.
Four-room flat prices gained 11.9 per cent, while 3-room and executive flat prices both rose 11.5 per cent on the year. Five-room flat prices, meanwhile, were up 10.9 per cent. Mature and non-mature estate resale prices increased 9.4 per cent and 12.3 per cent respectively.
A 5-room unit located at Henderson Road fetched S$1.4 million in May, setting a new all-time price record for HDB resale flats. This surpassed the previous record of S$1.39 million set in March 2022 for a 5-room resale flat at Pinnacle@Duxton.
May 2022 saw 30 million-dollar resale flat transactions, up from 22 the month before. A third of these flats sold were executive flats, 18 were 5-room flats, while the remaining 2 were 4-room flats.
“Clearly the lack of new supply of 5-room and larger flats are forcing buyers to chase after limited supply in the resale market and supporting the rising number of such million-dollar transactions,” said Mark Yip, Huttons Asia chief executive.
Bishan saw the most million-dollar HDB resale transactions with 5 deals, followed by Bukit Merah, which saw 4 resale flats changing hands. Toa Payoh, Central Area, Ang Mo Kio and Queenstown each recorded 3 units resold for at least S$1 million.
The rest of the million-dollar HDB resale flats came from Kallang/Whampoa, Clementi, Serangoon, Yishun, Pasir Ris and Woodlands. Notably, Pasir Ris and Woodlands recorded their first million-dollar HDB resale transactions.
Analysts expect demand for HDB resale flats to moderate in the coming months as buyers increasingly resist high prices and homebuyers’ confidence in the delivery time of BTO flats is restored.
“One of the contributing factors pushing up the demand and prices of HDB resale flats is the delay in the completion of BTO flats,” said ERA Realty head of research and consultancy Nicholas Mak.
He also noted the Singapore government’s determination to cool the HDB resale market by supplying the market with more BTO flats. It will launch another 4,900 flats in its August BTO exercise and 9,500 for the November exercise.
On top of cooling measures, buyers may also be less willing to shell out for more expensive properties amid rising inflationary pressures, noted PropNex Realty head of research and content Wong Siew Ying.
“Rising interest rates, meanwhile, may not be such a big concern for HDB flat buyers who are taking a housing loan from the HDB, as the applicable interest rate is still pegged at 0.1 per cent above the prevailing CPF (Central Provident Fund) Ordinary Account interest rate at 2.6 per cent,” she added.