by OrangeTee & Tie Pte Ltd.

HDB resale prices climb 2.8% in Q2, transaction volumes fall

HDB Quarterly Data

Singapore, 22 Jul 2022

According to figures released by the Housing Development Board (HDB) on Friday, July 22, resale prices rose 2.8 per cent in Q2 2022 when compared to Q1 2022. However, HDB resale transactions fell by 1.7 per cent from the previous quarter, having 6,819 cases in Q2 2022 and 6,934 in Q1 2022. Resale transactions has declined for the third consecutive quarter and based on a year-on-year, transactions were 3.5 per cent lower.

Christine Sun, senior vice-president of research and analytics at OrangeTee & Tie, said the higher HDB resale price tags come as no surprise, given how the values of other asset classes have also climbed despite the pandemic.

“Ample liquidity from massive stimulus programmes worldwide has made its way to the real estate sector, including Singapore. Moreover, many investors have parked their money in our real estate properties, which are widely regarded as safe-haven investments that retain value or appreciate during market downturns,” she noted. OrangeTee & Tie has estimated resale prices will grow by 7 to 9 per cent for the entire year.

Sun of OrangeTee & Tie however believes sales volumes still remain at a “healthy level” considering how prices have increased for several consecutive quarters. She estimates that 25,000 to 28,000 resale flats could be transacted this year. 

According to Sun, rental volumes may have dipped in response to the rising rents and the potential decline of rental stock as many homeowners have sold their flats over the past year - resulting in fewer flats being put up for rental. OrangeTee & Tie’s Sun added: “As HDB continues to launch more BTO flats in the second half of this year, the increased housing supply will continue to draw demand away from the resale market, which may help to regulate the pace of price growth and tame market exuberance.”

While Sun believes higher interest rates have yet to affect the public housing market substantially, this may be more keenly felt when rates edge towards 3 to 3.5 per cent. “Should such a situation occur, more first-time borrowers may switch to a HDB loan pegged to 2.6 per cent. Other borrowers may pay down their loans to reduce their monthly instalments,” she said.

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