Press Release
27 Oct 2023
HDB has just released the Q3 2023 public housing data.
https://www.hdb.gov.sg/about-us/news-and-publications/press-releases/27102023-Upcoming-Flat-Supply-and-3Q2023-Public-Housing-Data
Overview
HDB resale prices grew at a slower pace last quarter as some price resistance could have set in amid inflationary and affordability concerns. Home buyers’ affordability has been hit by rate hikes as interest rates have stayed higher and longer than anticipated.
HDB resale prices showed more signs of stabilization last quarter, with a slower growth rate of 1.3 per cent compared to the previous quarter's 1.5 per cent increase. Year-to-date, prices increased by 3.8 per cent, less than the growth rate of 8 per cent seen in the first three quarters of 2022 and 9.1 per cent in the same period of 2021.
Although HDB resale prices had risen for 14 consecutive quarters, this year's quarterly price growth was noticeably slower, below 2 per cent per quarter. Comparatively, the quarterly price growth was consistently above 2 per cent for each quarter in 2022 and above 2.9 per cent for each quarter in 2021. The trends indicate that the cooling measures and the increased housing supply are effective in taming the price hikes.
Resale volume increased by 2.8 per cent from 6,514 units in Q2 2023 to 6,695 units in Q3 2023. However, the resale volume is still 11.3 per cent lower than in the same period last year at 7,546 units.
The increase in sales could be attributed to first-timers turning to the secondary market after the August BTO sales launch was delayed to October. In addition, some flat owners may not have the financial capability to pay the Additional Buyer's Stamp Duty (ABSD) upfront when they upgrade to a private home. This could have led some to buy resale flats instead.
The proportion of sales by flat type changed in Q3 2023 compared to the same period a year ago. The proportion of sales for bigger flats like 5-room flats dropped from 25.4 per cent in Q3 2022 to 22.9 per cent in Q3 2023. Similarly, the proportion of executive flats dipped from 7.3 per cent in Q3 2022 to 5.8 per cent in Q3 2023. The trends indicate that demand for bigger flats was probably affected by the 15-month wait-out period imposed on private homeowners purchasing HDB resale flats.
Rental
According to HDB public housing data for Q3 2023, the approved applications to rent out HDB flats increased marginally by 0.1 per cent from 9,842 units in Q2 2023 to 9,852 units in Q3 2023. The leasing volume may remain firm in the long term as public housing offers cheaper rents than private homes, and the market will continue to be supported by foreign students, locals, and foreign workers seeking affordable rents.
Outlook
Regulatory restrictions from the Additional Buyer's Stamp Duty (ABSD) have raised the upgrading hurdle for some families, which may lead to fewer upgraders. More people may choose to stay put in their HDB flats, leading to less housing stock available for resale. However, HDB upgraders shifting into their new condominiums will need to sell their flats, resulting in more units listed for sale.
Moreover, some demand may be diverted to the BTO market as many flats are slated for sale across the island, with some plum sites in the city fringe or within walking distance of an MRT station.
The interplay of these effects may see resale volume dipping slightly to about 26,000 to 27,000 units this year, compared to 27,896 units in 2022. The full-year price growth for 2023 is estimated at around 4 to 5.5 per cent, lower than the 10.4 per cent in 2022 and 12.7 per cent in 2021.