Singapore’s HDB announces upcoming release of 6,800 BTO flats amid a slowing resale market

SINGAPORE: The Housing Development Board (HDB) unveiled plans to release approximately 6,800 Build-To-Order flats in Choa Chu Kang, Kallang Whampoa, Queenstown, and Tengah in early October.

This announcement comes ahead of another anticipated launch in December 2023, where around 6,000 flats in Bukit Panjang, Jurong West, Woodlands, Bedok, Bishan, Bukit Merah, and Queenstown will be offered.

However, these numbers are still tentative and may be revised as more details emerge.

Despite these new launches, the HDB remains committed to releasing a total of 23,000 flats in 2023 and reaching a milestone of 100,000 flats between 2021 to 2025.

HDB Resale Market: A Slowing Momentum

The HDB’s 3rd Quarter 2023 Resale Price Index (RPI) reveals a rise of 1.2%, reaching 178.4.

Although this signifies growth, it’s notably less than the 1.5% increase seen in the 2nd Quarter of 2023, and significantly less than the average quarterly growth of 2.5% in 2022.

Resale volumes also offer a mixed picture. While there’s a slight quarter-on-quarter increase (2.9%) from the previous quarter, it’s notably lower (9.7%) than the same period in 2022.

In fact, the 3rd Quarter of 2023 recorded the lowest transaction volume since 2020.

Insights from PropertyGuru

Dr Tan Tee Khoon, Country Manager – Singapore at PropertyGuru, suggests that the HDB resale market might be at its zenith.

Despite marking the fourteenth consecutive quarter of growth, the rate of price growth has slowed, and transaction volumes have dipped.

Factors influencing the rise in HDB resale prices include a sustained demand for larger flats, particularly 3-room, 4-room, and 5-room units.

Interestingly, million-dollar HDB flats, especially from mature estates, continue to make headlines, hinting at potential record-breaking transaction numbers this year.

Another notable transaction was the sale of a 1,367 sq ft executive apartment in Bukit Panjang for $1.02 million in September 2023, a first for the estate.

However, million-dollar transactions still represent a small fraction of overall sales, accounting for only 2.0% of total HDB resale transactions in the 3rd Quarter of 2023.

Addressing future trends, Dr Tan notes that HDB resale prices remain resilient due to continued demand for larger flat types, catering to post-pandemic preferences.

Despite million-dollar flats breaking price ceilings in select locations, their shorter lease periods underscore the premium buyers place on space and location.

A significant drop in HDB flats reaching their Minimum Occupation Period (MOP) in 2023 compared to 2022 suggests sustained demand, especially among budget-conscious first-time buyers and upgraders.

However, with only a slight increase in transaction volumes and the influx of newly MOP-ed HDB flats, Dr Tan anticipates that HDB resale prices may peak by year-end.