Prices of HDB resale flats, private homes rise at slower pace in third quarter: Flash estimates
SINGAPORE: Prices for HDB resale flats and private residential properties rose at a slower pace in the third quarter of this year, according to flash estimates released by the Housing and Development Board (HDB) and Urban Redevelopment Authority (URA) on Monday (Oct 3).
Resale HDB prices rose 2.4 per cent in the third quarter, compared with 2.8 per cent in the second quarter.
The resale price index, which provides information on general price movements in the resale public housing market, rose from 163.9 to 167.8, estimates showed.
Analysts said the slower price growth indicates that the housing sector has started to feel the effects of rising interest rates and inflation.
"Price resistance may have set in as the Cash-Over-Valuation (COV) seems to have declined in recent months," said OrangeTee & Tie's senior vice president of research and analytics Christine Sun.
COV refers to the difference between the transacted price and the unit’s official valuation by the HDB, which buyers must pay fully in cash.
HDB resale prices are also expected to moderate in the fourth quarter in the wake of newly announced cooling measures.
"Private property owners will now need to sell off their private property and wait 15 months before they can buy a HDB resale flat," said Mr Lee Sze Teck, senior director of research at Huttons' Asia.
"This effectively cuts off the demand from private property owners and ex-private property owners. But this is a temporary measure. It may be reinstated back to the old policy once prices stabilise and the attention-grabbing million-dollar flat situation has cooled ... Some demand may flow to the 4-room flats and push up prices," he added.
Mr Lee also expected prices to moderate further to 1.0 per cent to 2.0 per cent in the fourth quarter, giving rise to a full-year price gain of not more than 10 per cent.
Meanwhile, Ms Sun said the 15-month wait-out period for private homeowners purchasing HDB flats will impact the upper tier of the market adversely.
"Since some private homeowners will face bigger hurdles in purchasing resale flats, there will likely be a temporary pull-back in demand for large flats which may result in a price correction in the coming months."
She also added that new measures like the tightening of borrowing limits for both HDB loans and private loans, as well as a more stringent total debt servicing ratio (TDSR) and the mortgage servicing ratio (MSR), will be affecting almost all flat buyers, including BTO flat purchases.
Meanwhile, private home prices rose 3.4 per cent in the third quarter, compared with 3.5 per cent in the previous quarter.
Prices in the Outside Central Region (OCR) rose the most - by 7 per cent compared with the 2.1 per cent increase in the previous quarter, URA data showed.
Analysts attributed the steep increase to rising median prices of new non-landed homes.
"There were 3 major launches in 3Q 2022 - AMO Residence, Lentor Modern and Sky Eden@Bedok which are all in the OCR," said Mr Lee.
"AMO Residence was a near sell-out in July, achieving an average price of S$2,113 per square foot. Sky Eden@Bedok sold 75 per cent at an average of S$2,100 per square foot on launch day. These two projects probably played a part in the steep rise in OCR prices."
Ms Sun added that the higher median prices together with a high volume of such transactions led to a significant increase in the overall index for OCR.
The median prices of new non-landed homes last quarter rose by 18 per cent from S$1,774 per square foot in Q2 2022 to a record S$2,093 per square foot in Q3 2022, she pointed out.
"Last quarter also saw more non-landed new sales in OCR, which jumped from 471 units in Q2 2022 to 1,238 units in Q3 2022. Therefore, the higher median prices coupled with a high volume of such transactions led to a significant increase in the overall index for OCR."
Prices in the Core Central Region (CCR) rose by 2.3 per cent up from the 1.9 per cent increase in the previous quarter. Meanwhile, those in the Rest of Central Region (RCR) rose at a slower pace of 2.5 per cent compared with the 6.4 per cent in the previous quarter.
The flash estimates are compiled based on transaction prices given in contracts submitted for stamp duty payment, and data on units sold by developers up till mid-September.
URA will release its full set of updated real estate statistics for the third quarter of 2022 later this month.
In an update on upcoming sales launches, HDB said it will offer in November about 9,500 BTO flats in areas such as Bukit Batok, Kallang Whampoa, Queenstown, Tengah and Yishun.
In February 2023, about 2,900 to 3,900 BTO flats in areas such as Kallang Whampoa, Queenstown and Tengah will be made available.
"This number is subject to review as more project details will be firmed up closer to the launch date," it added.
There is a good mix of (flats) across mature and non-matures estates and (it) may draw demand from the resale market, said Mr Lee.
He added that some of the flats are on sites that could come under the Prime Location Public Housing model - one in Kallang Whampoa, one along Queensway and one at Ghim Moh.
HDB also said it will launch up to 23,000 new flats in 2023 and is prepared to launch up to 100,000 flats in total from 2021 to 2025 if needed.
"HDB will continue to monitor the housing demand and adjust the plans where necessary."