SINGAPORE — The Housing Development Board (HDB) of Singapore announced on Monday plans to launch an increased number of Build-To-Order (BTO) flats and shared the flash estimate of the 2nd Quarter 2023 Resale Price Index (RPI).
According to HDB, about 13,000 BTO flats will be offered in the second half of the year, marking an increase of approximately 31% from the 9,923 units launched in the first half.
Specifically, in August, HDB will introduce 6,700 flats in towns and estates, including Choa Chu Kang, Kallang Whampoa, Queenstown, and Tengah.
In November, another 6,300 flats will be available in Bedok, Bishan, Bukit Merah, Bukit Panjang, Jurong West, Queenstown, and Woodlands. These numbers are subject to further revision as project details are finalized closer to the launch dates.
As part of an ongoing effort to meet rising housing demand, the HDB has upped its BTO flat supply by 35% from 17,100 flats in 2021 to 23,000 flats in 2023.
The board confirmed it will continue monitoring housing demand closely and maintain a steady supply pipeline, aiming to launch a total of 100,000 flats from 2021 to 2025.
In relation to the resale market, the government has implemented several cooling measures since December 2021 to promote a stable and sustainable property market.
These measures include a 15-month wait-out period before private property owners can purchase a non-subsidized HDB resale flat and a lowered Loan-to-Value (LTV) limit for HDB housing loans from 90% to 80%.
The cooling measures have resulted in some moderation in the rate of increase in resale prices. The HDB’s flash estimate of the 2nd Quarter 2023 RPI is 176.0, a 1.4% increase over the 1st Quarter.
Although this represents a higher increase than the 1.0% growth in the 1st Quarter, it is still lower than the average quarterly growth of 2.5% in 2022.
The resale volume in the 2nd Quarter 2023 has decreased by 4.6% from the same period last year, amounting to 6,409, marking the lowest in the last three years.
Dr Tan Tee Khoon, Country Manager – Singapore, PropertyGuru, commented on the HDB’s announcements, indicating that the rise of HDB resale prices is driven by a persistent preference for larger flat types and a record-breaking $1.5 million transaction for a 1,894 sq. ft flat in Tiong Bahru.
Despite the slowing pace of million-dollar flat transactions, Dr Tan opined that small gains are expected in the coming quarter due to buyers’ willingness to pay price premiums for space in prime neighbourhoods.
However, he warns that with price resistance setting in, increased flat supply due to more BTO flats being launched, less competition from private property ‘downgraders,’ and more HDB upgraders putting their homes on the resale market, prices may be nearing their peak.
Dr Tan notes, “Buyers are also now less pressured to offer high bids due to increased flat supply. The reason for this is threefold: more BTO flats being launched; less competition from private property ‘downgraders’ due to the September 2022 property cooling measures; an approximate 16,000 flats expected to fulfil their Minimum Occupation Period (MOP) this year, and as more Executive Condominiums (ECs) and private homes being completed translates to more HDB upgraders putting their homes on the resale market.”
