Public housing resales fall but prices remain high
Public housing resale transactions in Singapore fell 12.7 per cent in the first quarter from the previous three months, a reflection of government market cooling measures, global market uncertainties and delays in completion of some residential projects.
Prices grew 2.4 per cent on the quarter, the slowest rate of growth since the height of the pandemic in the third quarter of 2020, when prices inched up 1.5 per cent.
“Homebuyers and the Housing and Development Board have adopted a wait-and-see approach,” said Lee Sze Teck, senior director (research) at Huttons Asia.
Still, given tight supply, HDB resale prices reached a peak in the first quarter of this year and are 9.4 per cent above the previous high in the second quarter of 2013, Lee said.
“The tight supply and climbing prices present a conundrum for existing homeowners who are worried that they will not be able to find a replacement home should they sell their property now,” he said.
The price growth was attributed largely to appreciation in larger flats, according to research by broker ERA Realty Network.
In the first three months of this year, median prices of five-room flats and executive flats increased 2.6 per cent and 2.8 per cent on the quarter respectively, while the median price of three-room flats rose by a smaller 2.3 per cent to S$358,000 (HK$2 million). The median price of two-room flats remained unchanged at S$280,000 over the same period.
Despite the high prices, demand for resale flats was expected to remain relatively firm during the year, supported by first-time homebuyers, upgraders and would-be build-to-order buyers who had been deterred by further delays in completions of projects and chose ready resale units instead, Wong said.
Meanwhile, the tight supply situation could be partially alleviated by an estimated 30,196 units that will reach the end of their minimum occupancy period, Lee said.
He predicts that a considerable number of units could be put up for sale to capitalise on the current high prices.
Nicholas Mak, head of research and consultancy at ERA Realty, sees two opposing factors influencing the HDB resale market this year.
The first would be the government’s plan to push out 23,000 HDB build-to-order flats this year, and another 23,000 next year if necessary.
“The higher supply of build-toorder flats could help to cool down the robust HDB resale market,” he said.
However, delays and disruptions in the construction of buildto-order flats could gradually ease this year, and this could in turn, attract more homebuyers to turn away from the HDB resale market.
“These two factors could slow down the pace of HDB resale price growth,” Mak said.