Amidst a lukewarm BTO launch, HDB resale prices and volumes show a modest rebound

In the ever-dynamic landscape of Singapore's housing market, October 2023 has marked itself with subtle yet significant shifts. The Housing and Development Board (HDB) resale segment has witnessed a price increment, coupled with a noteworthy volume of high-value transactions, despite a less than enthusiastic response to the latest Built-To-Order (BTO) launch.

"HDB seekers in October may not be impressed with what was offered in the October BTO launch. The October BTO launch saw its lowest average take-up rate for three Rooms and above configurations when compared to its past 10 launches," says 99.co's Chief Data Officer Luqman Hakim.

Market dynamics

The SRX Property Price Index for HDB Resale indicates a 0.5 per cent price increase in October 2023 compared to the preceding month. This rise is nuanced across different sectors, with Non-Mature Estates seeing a 0.8 per cent increase and Mature Estates a 0.6 per cent uptick. Room types also varied, with three-room flats increasing by 0.3 per cent, four-room by 0.7 per cent, and Executive flats by a striking 1.7 per cent, while five-room flats experienced a slight decrease of 0.4 per cent.

Year-on-year analysis paints a broader picture of growth, with an overall price increase of 5.3 per cent from October 2022. All room types have seen increases, particularly Executive flats, which have surged by 7.4 per cent.

Luqman Hakim says, "Some of these HDB seekers may instead turn to the Resale market for more choices and this likely contributed to the 11 per cent increase in resale volume in October. However, we expect Resale volume to stay slightly the same or lower in November and December due to the holiday period and as HDB seekers await to participate in the December HDB BTO launch."

Transaction volume

The resale market saw 2,200 flats change hands in October, marking a 10.8 per cent decrease from September 2023. However, this represents a 12 per cent increase from the previous year. The distribution of sales across room types and estates further highlights the market's diversity, with Non-Mature Estates accounting for 62.2 per cent of the resale volume.

"Following the rise in volume, resale prices in October also increased by 0.5 per cent. October also saw 41 "million-dollar" transactions — this brings the total number of million-dollar transactions in 2023 to 377, just exceeding the whole of 2022's 370 transactions above million dollars," says Luqman Hakim.

Record-breaking deals

A five-room flat at Henderson Road set the record for the month with a transaction price of $1,450,000. In contrast, Non-Mature Estates saw their highest price at $995,888 for an executive apartment at Jurong East St 21.

Million-dollar flats

Despite a slight decrease from the previous month, October saw 41 HDB resale flats transacted for at least $1,000,000.

These high-value sales comprised 1.9 per cent of the total resale volume, with Bishan and Bukit Merah leading the pack with seven units each.

Market outlook

The modest BTO launch in October, which recorded a low average take-up rate, may have redirected potential buyers towards the resale market, contributing to the 11 per cent increase in resale volume. As the year-end approaches, the market anticipates a stable or slightly lower volume, with potential buyers possibly holding off for the December BTO launch.

Luqman Hakim claims that interestingly, October is also the first month in 2023 that we did not see any million-dollar transactions in any Non-mature estates — the last time this happened was in April 2022.

Conclusion

The HDB resale market's resilience is evident in the price and volume trends of October 2023. With the total number of million-dollar transactions this year surpassing the entire previous year, the market's appetite for premium HDB flats remains robust.

As buyers navigate between BTO launches and resale options, the market continues to offer a spectrum of choices catering to diverse needs and preferences.

ALSO READ: HDB faces record deficit: A dive into the contributing factors

This article was first published in 99.co.