Singapore HDB resale prices up for 19th straight month in January

Flat prices inched up 1.1% month-on-month.

Singapore HDB resale prices rose 1.1% month-on-month in January 2022, marking the 19th consecutive month of increase. Meanwhile, SRX data reveal that resale volumes rose by 0.6% month-on-month to 2,442 units in January 2022, but were down by 2.4% on a year-on-year basis.

According to Wong Siew Ying, Head of Research and Content, PropNex Realty, seeing that transaction volumes inched up last month from December despite the fresh cooling measures and the seasonal lull prior to the Lunar New Year suggests that resale flat demand remains very much intact. Based on transaction data, Sengkang, Punggol and Yishun were the top three most popular estates in terms of sales in January 2022.

Here’s more from PropNex:

The HDB resale market is expected to stay resilient as first-time Singaporean home buyers, who form the bedrock of the demand pool for HDB resale flats, have not been significantly affected by the new property curbs. The reduction in loan-to-value (LTV) limit for HDB loans to 85% is not expected to significantly impact buying demand as many Singaporean households have ample savings. 

In addition, some buyers have also been opting to finance their property purchase with private bank loans where interest rates are currently lower than that of HDB loans. That said, the tightened LTV limit for HDB loans may encourage buyers to be more prudent and right-size their flat purchase, while HDB resale price growth will likely be more measured, with sellers mindful of price sensitive buyers.

In addition, the ramping up of new Build-to-Order (BTO) flat supply this year may not immediately temper demand for HDB resale units as some buyers who are not eligible for BTO flats – including those who have exceeded the income ceiling – could seek to purchase homes in the HDB resale market. 

Furthermore, buyers who have more pressing housing needs will also prefer resale HDB flats rather than waiting for a BTO project to be completed in the next few years. Meanwhile, firm private home prices and a growing preference for more spacious homes may encourage some buyers to turn to HDB resale flats.

Together with the recovering job market and economic growth outlook, these factors should continue to drive demand for resale flats and support HDB resale values. Though some downside risks including the impending interest rate hikes and rising inflation may put pressure on resale prices and rein in buying sentiment. PropNex expects overall HDB resale prices to climb at a slower pace of 6% to 8% in 2022, easing from the 12.7% increase in 2021.

There were 27 HDB flats that were resold for at least $1 million in January 2022 – led by Queenstown where six such flats were transacted.