HDB resale prices to cool off at 5%-8%: experts

Meanwhile, expect demand for resale flats to increase in the second half of 2023.

Expect the overall resale prices of Singapore's HDB flats to continue to rise in 2023, but at a slower pace of between 5% to 8%, OrangeTee said in a report.

OrangeTee analysts expect Singapore's small resale flats to continue to find favour with buyers as housing affordability takes center stage and rising interest rates, inflationary pressures, and high resale prices may limit their purchasing power.

The report added that demand for small flats would likely rise faster in 2023 than for its bigger counterparts. This is a result of the government giving CPF Housing Grants to first-time homeowners who want to purchase 4-room and smaller flats.

READ MORE: HDB resale volume down 4.3% MoM in April

OrangeTee also expects more transactions for 2-room minimum occupation period (MOP) flats this year, as there will be 3,763 units obtaining MOP this year. Transactions for 2-room MOP flats grew by 39% to 196 in the first quarter of 2023 from 141 units in the fourth quarter of 2022.

Meanwhile, expect demand for resale flats to increase further in the second half of 2023, as stricter rules for the non-selection of BTO flats will be imposed starting August 2023. 

"First-timers who lose their priority when they reject HDB's offer to pick BTO flats will likely turn to the resale market," OrangeTee said.