The Singapore resale market experienced a mixed performance in September 2023, with HDB resale prices dropping for the first time since February, while private non-landed resale prices continued to rise. Resale volumes also declined for both segments, as buyers and sellers faced uncertainties amid the COVID-19 pandemic and cooling measures.
HDB Resale Prices and Volume
According to the SRX Property Price Index for HDB Resale, HDB resale prices fell by 0.4% month-on-month in September 2023, reversing the upward trend that started in March 2023. The decline was mainly driven by the mature estates, which saw a 0.9% price drop, while the non-mature estates registered a 0.1% increase.
The price drop coincided with a decrease in resale volume, as 1,985 HDB resale flats were transacted in September 2023, representing a 19.7% decrease from August 2023. This was the lowest monthly volume since May 2023, when the circuit breaker measures were in place. The volume was also 13.6% lower than the five-year average volume for the month of September.
The highest transacted price for a resale flat in September 2023 was achieved by an executive apartment at Bishan Street 24, which sold for $1.45 million. There were also 42 HDB resale flats that transacted for at least $1 million, down from 54 such units in August 2023.
Some analysts attributed the decline in HDB resale prices and volume to the recent announcement of the Enhanced CPF Housing Grant (EHG) in the Budget 2023, which increased the income ceiling and grant amount for first-time buyers of new and resale flats. The EHG, which took effect from Sep 11, 2023, could have caused some buyers to delay their purchases or switch their preference to new flats, which are generally cheaper and have a longer lease.
However, other analysts opined that the EHG could boost the demand for HDB resale flats in the long run, as more buyers would be eligible and have greater affordability. They also noted that the supply of new flats was limited and subject to long waiting times, which could drive some buyers to the resale market instead.
Private Non-Landed Resale Prices and Volume
On the other hand, the private non-landed resale market saw a slight increase in prices in September 2023, as the SRX Property Price Index for Private Non-Landed Resale rose by 0.2% month-on-month. This was the seventh consecutive month of price growth since March 2023. The price increase was led by the Rest of Central Region (RCR), which recorded a 0.6% rise in prices, followed by the Core Central Region (CCR), which registered a 0.4% increase. The Outside Central Region (OCR) saw a marginal decline of 0.1% in prices.
However, similar to the HDB resale market, the private non-landed resale volume also fell in September 2023, as only 583 units were transacted, representing a 16.4% decrease from August 2023. This was also the lowest monthly volume since May 2023 and was 31.5% lower than the five-year average volume for the month of September.
The lower volume could be due to several factors, such as the Hungry Ghost Festival, which is traditionally considered an inauspicious period for property transactions; the resurgence of COVID-19 cases and tighter social distancing measures; and the lingering effects of the cooling measures introduced in July and September last year. These measures included higher Additional Buyer’s Stamp Duty (ABSD) rates for some buyers, lower Loan-to-Value (LTV) limits for all buyers, and stricter rules for developers who buy residential land under government land sales or en bloc sales.
Some analysts expected the private non-landed resale market to remain subdued for the rest of the year, as buyers and sellers adopt a wait-and-see attitude amid the uncertain economic outlook and property market conditions. They also pointed out that some developers who bought land under government land sales or en bloc sales before July last year would face hefty ABSD charges if they failed to sell all their units within five years of acquiring the land. This could result in more supply and price competition in the new launch market, dampening the demand and prices for resale properties.
However, other analysts were more optimistic, as they believed that the private non-landed resale market still had some underlying strengths, such as the limited supply of new launches, the strong demand from foreigners and permanent residents, and the low-interest rate environment. They also noted that some buyers might prefer resale properties over new launches, as they offer more choices, larger sizes, and immediate occupation.
Conclusion
In summary, the Singapore resale market showed signs of cooling in September 2023, as both HDB and private non-landed resale prices and volumes declined from the previous month. The market was affected by various factors, such as the EHG, the COVID-19 pandemic, the cooling measures, and the Hungry Ghost Festival. However, analysts had different views on the outlook for the resale market, as some expected a further slowdown, while others anticipated a rebound. The resale market performance in the coming months will depend on how these factors evolve and how buyers and sellers react.
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