HDB resale prices are hitting their peak: analysts

Restored BTO supply is turning attention away from the resale market.

All signs are pointing that HDB resale flat prices are hitting their peak, Dr Tan Tee Khoon, Country Manager – Singapore at PropertyGuru said.

This comes as HDB resale flat prices saw a modest growth of 1.5% in Q2, with resale volume decreasing by 6.7% in Q2, the lowest volume since Q2 2020.

“While buyers are still willing to pay price premiums for space, there are clear indications that government intervention has worked.  The September 2022 property cooling measures have deterred more private property owners from ‘rightsizing’ to HDB flats due to their 15-month wait-out period. This can be seen by the stabilising number of million-dollar HDB flats,” Tan said.

READ MORE: New property cooling measures: Gov’t imposes stringent housing loan limits

Christine Sun, Senior Vice President of Research & Analytics at OrangeTee said that some of the demand may be diverted to the BTO market since HDB will continue to launch new flats in various locations in the second half of this year. 

“Some first-timers may be enticed as HDB will launch more flats in mature estates like Kallang/ Whampoa, Queenstown, Bedok, and Bukit Merah, which are typically popular with buyers. As stricter rules will be imposed for the non-selection of BTO flats from August 2023, first-timers who fail to obtain a BTO flat will likely turn to the resale market, thus sustaining demand in the second half of this year. ” Sun said.

However, Lee Sze Teck, Senior Director, Data Analytics at Huttons said that in the upcoming September BTO launch, there may be some BTO projects ain mature estates and some with shorter construction period that may be attractive to more potential buyers.

“This may siphon away some resale demand and there may not be any noticeable change in resale demand,” Lee said

Huttons estimates HDB resale flats to moderate to not more than 5% in 2023 whilst OrangeTee said prices may rise to between 4% to 6%.