According to the Housing Development Board (HDB) flash estimate of the 1st Quarter 2023 Resale Price Index (RPI), resale prices have continued to increase, albeit at a slower pace.
The RPI increased by 0.9% from the previous quarter, marking the 12th consecutive quarter of increase.
The slower increase in RPI is attributed to the fact that it is the smallest quarterly increase compared to the last ten quarters and is lower than the 2.3% increase in the 4th Quarter of 2022.
However, the resale volume in 1st Quarter 2023 (up to 30 March) increased by 1.0% compared to the same period last year, indicating that demand for HDB resale flats remains strong.
To meet the demand for affordable housing, HDB will offer around 5,400 Build-To-Order (BTO) flats in May, followed by between 5,200 and 6,200 flats in August.
These numbers are subject to review as more project details will be firmed up closer to the launch dates.
HDB has also pledged to continue monitoring housing demand and is prepared to launch up to a total of 100,000 flats from 2021 to 2025.
However, Singaporeans are becoming more cautious about the record-high prices sellers are asking for HDB resale flats, according to the PropertyGuru Consumer Sentiment Study H1 2023.
While demand for these properties remains strong, about 3 in 10 people find it reasonable for HDB resale properties to be sold at S$1 million or more.
Dr Tan Tee Khoon, PropertyGuru’s Country Manager for Singapore, noted that HDB resale prices may be stabilizing as price growth for private properties tapered in Q1 2023.
The PropertyGuru Consumer Sentiment Study H1 2023 reported that 31% of Singaporeans are now considering a BTO flat due to affordability concerns.
This means that young couples who previously considered buying HDB resale flats due to their short waiting times are increasingly agreeable to waiting years before their homes are completely developed.
In addition, the CPF Housing Grant for Resale Flats (Families) and (Singles) increments announced during the Budget 2023 statement have provided eligible first-timer applicants with more financial muscle, an important support for homebuyers looking to enter the HDB resale market.
This may have alleviated some affordability concerns for first-time young families with children and young married couples aged 40 years and below who needed to move into their new homes quickly.
Dr Tan commented that he believes that HDB resale demand should gradually stabilize in 2023 as more BTO projects are completed, construction delays continue to alleviate, and more BTO flats are offered at quarterly HDB launches.
“We should expect the momentum of the price appreciation to slow and the HDB resale market to stabilise, barring any economic shocks.”
However, he notes that rising interest rates will result in increased borrowing costs and eat into the budgets of prospective buyers, especially first-time home buyers.
