HDB announces upcoming flat supply amidst signs of moderation in resale market growth

SINGAPORE: The Housing & Development Board (HDB), in its latest report for the 3rd Quarter of 2023 this Friday, shed light on the current real estate landscape and outlined its plans for the final quarter of 2023.

The key highlight of HDB’s announcement is the introduction of approximately 6,000 Build-To-Order (BTO) flats scheduled for December 2023. These new flats, spanning high-demand areas such as Bukit Panjang, Jurong West, and Woodlands, form part of the government’s sustained efforts to reinforce the housing supply, thereby aiming to stabilize the market.

Parallel to this initiative, recent statistics from HDB indicate a subtle slowdown in the HDB resale market’s upward trajectory. Despite a consistent rise in the Resale Price Index, with the 3rd Quarter of 2023 seeing a 1.3% increase, the growth rate is notably lesser than in previous quarters. Furthermore, resale transactions have dipped compared to the same period in the preceding year, suggesting a potential plateauing in market activity.

The median resale prices for 5-room flats in Bishan, Bukit Merah, Kallang/Whampoa, and Toa Payoh have exceeded S$900,000.

This moderation is partially attributed to the cooling measures instituted by the government in September 2022. The strategic imposition of a 15-month wait-out period for private property owners eyeing non-subsidised HDB resale flats, coupled with the adjustment of the Loan-to-Value limits, was designed to calm the fervent market demand.

However, even with these regulatory checks, certain market aspects continue to surge. A standout trend is the escalating number of million-dollar HDB flat transactions. Current year-to-date figures are poised to surpass records, emphasizing the persisting appetite for premium, spacious units amidst broader market temperance.

The rental market saw a modest 0.1% increase in approved applications for renting out HDB flats, rising from 9,842 in Q2 2023 to 9,852 in Q3 2023. This uptick is significant, representing a 20.3% surge compared to Q3 2022. As of the end of Q3 2023, rentals of HDB flats had grown by 1.7%, with 57,797 units rented out compared to 56,858 in the previous quarter.

Responding to these trends, Dr Tan Tee Khoon, Country Manager – Singapore at PropertyGuru, shared his insights, pinpointing the sustained demand for larger flats as a key market mover. “While the cooling measures have generally tempered rapid price increases, specific segments of the buyer market remain active, particularly those seeking more spacious HDB units,” Dr Tan commented.

Highlighting the significance of million-dollar transactions, he added, “These high-value deals, especially in non-mature estates, are reflective of a specific buyer sentiment. Buyers are looking at larger HDB flats as valuable alternatives to more expensive condominiums, considering the substantial space offerings relative to the price.”

Dr Tan anticipates that the market’s affinity for larger units will keep prices buoyant, albeit with more gradual growth. “The current landscape suggests a continued, albeit slower, price increase in the HDB resale market. The demand for space, influenced by post-pandemic lifestyle changes, is a central factor here,” he concluded.