HDB resale prices rise for 27th straight month in September with record 45 million-dollar flats sold

SINGAPORE — Prices of resale Housing and Development Board (HDB) flats climbed for the 27th straight month in September, with a record 45 flats being sold for at least S$1 million. 

This beats the previous high of 36 million-dollar flats sold in a month in December last year.

On the whole, HDB resale prices rose 1.2 per cent in September compared to August, data jointly released on Thursday (Oct 6) by real estate portals 99.co and SRX showed.

The data largely recorded transactions made before authorities announced late on Sept 29 a latest round of property cooling measures that kicked in minutes later on Sept 30, introducing tighter loan limits and a 15-month wait-out period for the purchase of HDB resale flats by private property sellers.

Analysts said the buoyant market reflects homebuyers’ unwavering demand despite rising interest rates.

“As many HDB flat buyers tend to opt for a housing loan from the HDB, they may be less affected by the increase in mortgage rates,” said Ms Wong Siew Ying, head of research and content at property firm PropNex Realty.

Resale flat prices in September were up 11.1 per cent from September last year, with prices for the larger five-room and executive flats growing faster in year-on-year terms than three- and four-room flats.

The steep price growth for larger flats — at 12.4 per cent for five-room and 13.4 per cent for executive flats — may have been what prompted the cooling measures, said Ms Christine Sun, senior vice-president of research and analytics at property firm OrangeTee and Tie.

“Based on ground observation, a number of million-dollar flats and big flats seem to be bought by private homeowners who are cash-rich or have the financial means to pay high prices for these flats,” she said.

Ms Sun noted though, that the new 15-month wait-out period before private property sellers can buy a non-subsidised HDB resale flat will not apply to buyers aged 55 and above who are moving to a four-room or smaller resale flat.

“Prices of some smaller flats may continue to rise and we may see a higher proportion of million-dollar flat transactions coming from four-room flats in future,” she said.

A total of 2,589 resale flats were transacted in September, the highest monthly resale volume this year so far. This was a 11.4 per cent jump from the month before and 2.8 per cent higher than September 2021.

Ms Sun said this could be a reflection of buyers being priced out of the private housing market, where the median prices of new condominiums in the suburbs have reached new highs, breaching S$2,000 per sq ft.

Moreover, many applicants of HDB’s Build-to-Order (BTO) flats may have turned to the resale market, resigned that they may not stand a high chance of securing a unit in popular areas, she said. 

At the latest BTO sales launch in August, more than 34,000 people were vying for 4,175 three-room or larger flats.

Flats in non-mature estates made up about 60 per cent of the resale volume in September, led by sales in Sengkang, Yishun, Punggol and Woodlands, Ms Wong noted.

The proportion of buyers who bought flats priced at S$500,000 or higher has also grown in September compared to August, while the proportion of those buying cheaper flats has shrunk, she added.

With the new wait-out period for homeowners who sell their private property, Ms Wong said she expects demand for resale flats to moderate slightly, particularly for five-room and larger flats.

“That being said, we are still anticipating the number of million-dollar HDB resale flats sold this year to cross the 300-unit mark, supported by other groups of buyers such as first-timers and those upgrading or relocating from other HDB flats,” she said.

Mr Mohan Sandrasegeran, a senior analyst at real estate firm One Global Group, said that the cooling measures’ effects may not be realised until late November. 

Deals that were finalised at the end of September will only be reflected in the later part of October and November because it typically takes about eight weeks to process the resale application and complete the transaction, he said.