HDB resale prices picked up in the second quarter of this year, flash estimates released by HDB showed. Prices edged up for the 13th consecutive quarter, rising by 1.4 per cent in Q2 after growth of 1 per cent in the proceeding quarter.
The price increase was mainly driven by 5-room flats, whose median prices rose by 1.9 per cent from S$638,000 in Q1 2023 to S$650,000 in Q2 2023 and 4-room flats, whose median prices climbed by 1.5 per cent from S$537,000 to S$545,000 over the same period. Prices of 3-room flats dipped by 0.5 per cent in Q2.
103 resale flats were sold for at least a million dollars in Q2, on par with the 103 transactions in Q1. The priciest flat transacted was an adjoined flat at Moh Guan Terrace changed hands for S$1.5 million last quarter, which was a historical record price. The unit is attractively located at the city fringe and surrounded by amenities, and has a large living space of 176 sqm.
Where is the demand coming from
Demand may have risen after grants were increased for first-timers purchasing resale flats. Private property downgraders might have driven demand for 4-room flats as those above 55 years old are exempt from the 15-month wait-out period if they were to buy 4-room or smaller flats.
Some HDB upgraders priced out of the private market may have also bought the bigger resale flats.
Outlook
Some demand may be diverted to the BTO market since HDB will continue to launch new flats in various locations in the second half of this year. 6,700 BTO flats will be offered for sale in the August sales launch, while 6,300 BTO flats will be offered in November.
Some first-timers may be enticed as HDB will launch more flats in mature estates like Kallang/ Whampoa, Queenstown, Bedok, and Bukit Merah which are usually popular with buyers. The completion times for many of these projects may also be shortened.
Stricter rules will be imposed for the non-selection of BTO flats from August 2023. First-timers who lose their priority when they reject HDB's offer to pick BTO flats will likely turn to the resale market. Therefore, demand for resale flats may increase further in the second half of this year.