HDB resale prices continue to climb in September; record 45 million-dollar flats sold

SINGAPORE - Prices of Housing Board resale flats climbed for the 27th consecutive month in September, with a record 45 units changing hands for at least $1 million in a month.

HDB resale flat prices grew at a faster pace of 1.2 per cent in September, compared with August's 0.4 per cent, according to flash data from real estate portals 99.co and SRX on Thursday (Oct 6).

The exuberant HDB resale market, even in the face of rising interest rates, has prompted a fresh round of property curbs aimed at cooling the public housing market.

This includes a 15-month wait-out period for private property downgraders who wish to buy a HDB resale flat, and more stringent criteria in assessing home buyers' loan amounts.

Analysts said the full effects of the measures, which kicked in on Sept 30, will take some time to be reflected in flat prices and transaction volume, but are widely expected to moderate demand for larger units and cool prices.

This is because deals that were finalised at the end of September will be reflected only in the later part of October and November, as it takes about eight weeks to process an HDB resale application and to complete the transaction, said One Global Group senior analyst Mohan Sandrasegeran.

As a result, the full effect of the measures will likely be seen in figures from only December and onwards.

The curbs came as HDB resale prices increased by 7.8 per cent in the first nine months of 2022, fuelled by hot money from private property downgraders flowing into the HDB resale market, coupled with pandemic-related disruptions in the construction sector.

Of the 45 million-dollar flats sold in September, 17 were executive apartments and maisonettes, up from the five such transactions in August, an analysis from Huttons Asia showed.

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Executive apartments and maisonettes are typically larger than the standard HDB resale flats and are sought after for their rarity and generous floor areas.

Huttons Asia chief executive Mark Yip said: "This shows that buyers are chasing after space and the HDB resale market has such options at attractive prices."

In September, Punggol recorded its first million-dollar deal - a 149 sq m five-room loft unit at Block 268C Punggol Field changed hands for $1.198 million.

Mr Yip said the buyer of the unit paid a cash over valuation (COV) of almost $200,000, according to his agency's data.

COV refers to the difference between the sale price of a resale flat and its actual HDB valuation. The difference can be paid for only in cash by the buyer.

The 45 million-dollar flats sold in September make up 1.7 per cent of the total resale transaction volume for the month.

The number is also the highest monthly tally of such flats sold since the 36 transactions in December 2021.

It has been a record year for million-dollar HDB flat transactions, with 277 units sold to date in 2022, smashing the tally of 259 such deals for the whole of 2021 with three months to spare.

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In September, an estimated 2,589 HDB resale flats changed hands, up 11.4 per cent from August, data showed.

Non-mature estates saw more transaction activities, accounting for around 60 per cent of overall transactions, compared with 40 per cent in the mature estates.

Mr Yip said that higher interest rates had reduced the budgets of some buyers, who then went for HDB flats in the non-mature estates.

OrangeTee & Tie senior vice-president of research and analytics Christine Sun said one reason for the higher resale volume could be that median prices of new condominium launches in the suburbs have reached new highs, breaching the $2,000 per sq ft benchmark.

"Buyers who are priced out of the new condo market have probably turned to the HDB resale market," she said.

While PropNex Realty head of research and content Wong Siew Ying expects demand for five-room units and larger homes to moderate slightly due to the cooling measures, she reckons the number of million-dollar HDB resale flats would still cross the 300-unit mark. This is because demand may still be supported by other groups of buyers such as first-timers and those relocating from other HDB flats.

This article was first published in The Straits Times. Permission required for reproduction.