New housing policies boost HDB resale prices

In 3Q, prices rose 1.2% YoY.

HDB resale prices rose for the 14th consecutive quarter in 3Q23 and according to some experts, the new housing policies introduced during the National Day Rally contributed to the increase.

According to Huttons, demand has shifted to the existing resale flats in mature estates where there are no restrictions on resale.

Under the new housing policies,  HDB estates will be changed to Central, North, Northeast, West and East regions instead of mature and non-mature estates. New BTO flats, meanwhile, will be reclassified to Standard, Plus and Prime flats from 2H 2024. 

“In the Central Region where most of the current mature estates are located, new BTO flats will be Plus and Prime and come with restrictions on resale,” Huttons said.

“The reclassification of flats to Prime and Plus may have a role to play in the spike in the number of million-dollar flat transactions in August. Buyers are willing to pay more to buy a flat in the mature estates with no restrictions,” added Huttons.

Buyers’ willingness to pay more for existing flats with no restrictions may have also contributed to the increase in HDB resale prices by 1.2% in 3Q 2023, said Hutoons.
“HDB resale prices are up 3.8% in the first nine months of 2023 and 19.4% above the last peak in 2Q 2013,” Huttons reported.

OrangeTee, for its part, believes that the increase in both BTO and resale flat supply may push up prices “moderately for the rest of the year.”

The resale market, however, may not see a repeat of the rapid price increases witnessed during the pandemic, where HDB resale prices rose by 12.7 per cent in 2021 and 10.4 per cent in 2022, said OrangeTee.

“Prices may climb slower for the rest of the year, with the full-year growth at around 4 to 5.5 per cent,” said the expert.

According to Huttons, Housing Development Board (HDB) will launch  6,800 BTO flats in early Oct 2023 and around 6,000 BTO flats in Dec 2023, bringing BTO supply to around 23,000 in 2023.

“While there may be applicants who are put off by the penalties for non-selection of flats, there may be applicants who want to secure a BTO flat in mature estates before the new classification kicks in from 2H 2024. The interplay of these factors may not see a significant impact on the resale market,” Huttons said.