If you are thinking of buying or selling a resale HDB flat in 2023, you might be wondering how the market is performing and what are trends to look out for. In this blog post, we will summarize the key findings from the latest report by a leading real estate agency in Singapore, and share some insights on what to expect for the rest of the year.
Resale Prices Slow Down After Cooling Measures
The HDB resale market started the year on a softer note, as prices rose by only 0.9% quarter-on-quarter (QOQ) in Q1 2023, according to the flash estimates released by the HDB. This was a significant slowdown from the previous quarter when prices grew by double digits. The cooling measures introduced in September 2022, which included tighter loan requirements and a longer wait-out period for certain buyers, have dampened the price growth as buyers became more cautious and selective.
However, prices were still up by 8.7% year-on-year (YOY) from Q1 2022, reflecting the strong demand for resale flats in the past year. The HDB resale price index stood at 173.4 in Q1 2023, which was the highest level since Q2 2013.
Resale Volume Remains Healthy Despite Higher Interest Rates
Despite the higher interest rates and cooling measures, the demand for resale flats remained healthy in Q1 2023. Based on figures from HDB, 6,880 flats were resold in Q1 – up by about 4.3% from the 6,597 units sold in Q4 2022, though it was slightly down (-0.8% YOY) from the 6,934 units sold in Q1 2022.
The healthy resale volume was driven by buyers who needed to move in quickly, such as those who sold their private homes or had urgent housing needs. It was also supported by buyers who could not buy a new flat from HDB, such as permanent residents and high-income singles. Moreover, buyers who wanted larger flats in mature estates also turned to the resale market, where there were more options available than in the Build-To-Order (BTO) market.
Million-Dollar Flats Continue To Make Headlines
One of the most notable trends in the HDB resale market was the continued presence of million-dollar flats, which defied the cooling measures and made headlines in Q1 2023. In Q1 2023, 103 resale flats were resold for at least $1 million, compared to 92 units in Q4 2022. This was despite the introduction of a 15-month wait-out period for private homeowners who wanted to buy a resale flat larger than four rooms.
Interestingly, the number of four-room million-dollar flats increased significantly in Q1 2023, accounting for about 20% of the million-dollar deals. This could be due to some private homeowners who were exempted from the wait-out period and opted to buy four-room flats instead. These buyers may have been willing to pay a premium for choice flats, especially those with good locations and views.
Outlook For The Rest Of The Year
Looking ahead, we expect the HDB resale market to remain resilient in 2023, with the full-year resale volume potentially exceeding 28,000 units – higher than the 27,896 resold in 2022.
One of the factors that could boost the demand for resale flats is the increase in the CPF Housing Grant amount for eligible first-timer buyers announced in February 2023. Buyers can now receive up to $190,000 in grants to help fund their resale flat purchase. The higher grant amount may encourage more buyers to explore options in the resale market, especially for four-room and smaller flats which receive the most grants.
However, resale prices are likely to grow at a more moderate pace in 2023, as buyers face higher interest rates and price resistance. We project that HDB resale prices will grow by between 5% and 6% for the full year, moderating from the 10.4% growth achieved in 2022.
Conclusion
The HDB resale market has shown signs of slowing down in Q1 2023 after two years of strong price growth. The cooling measures and higher interest rates have affected buyer sentiment and affordability. However, there is still healthy demand for resale flats from various segments of buyers who have different needs and preferences. The higher CPF Housing Grant amount may also spur more interest in the resale market. Resale prices are expected to continue to grow in 2023 but at a more measured pace than before.
Contact Me For More Information
If you are interested in the latest property news or have any property-related needs or questions, feel free to contact me anytime. I am a professional and experienced property agent who can help you with buying, selling, or renting an HDB flat or any other type of property in Singapore. I can also provide you with a free and non-obligatory consultation on your property matters. You can reach me at +6597719040. I look forward to hearing from you soon.
