Singapore HDB resale prices soar 12.5% in full-year 2021

This is the highest annual growth rate since 2011.

According to Housing and Development Board (HDB) flash estimates, public housing flats’ resale prices increased 3.2% QOQ in Q4 2021. PropNex says the HDB resale price index reached a record high of 155.4 in the same period. For the whole of 2021, HDB resale prices jumped by 12.5% - the highest annual growth since 2011 where resale flat values rose by 10.7%.

Here’s more from Wong Siew Ying, Head of Research and Content, PropNex Realty:

Based on the flash estimate, HDB resale prices have hit a 10-year high on annual terms, rising by 12.5% in the full-year 2021. This strong run up in prices had perhaps given many HDB flat owners some cheer after witnessing the fall in resale flat values for six straight years from 2013 to 2018. However, such double-digit price growth is unsustainable over the long term. Amid the rising market, we note that a record 255 flats have been resold for at least $1 million in 2021.

We expect the pace of HDB resale price growth to slow to between 6% and 8% in 2022 as the new cooling measures are likely to temper the buoyant sentiment in the market. In addition, the HDB will also ramp up the supply of new Build-to-Order (BTO) flats over the next two years to provide more options for home buyers.

Nevertheless, we are still expecting the HDB resale demand to remain healthy as resale flat buyers – many are Singaporean first-time home buyers or upgraders – are least affected by the new property curbs.

While the ramp up in BTO supply will give Singaporeans more opportunities at securing public housing, it may not cool the hot demand for HDB resale flats entirely because the factors that drove demand in 2021 may continue to persist. These include construction delays and extended waiting time for BTO completions, as well as the tight supply of new mass market private homes and firm prices in the OCR, causing buyers to turn to the HDB resale market.

Based on preliminary sales data, 7,388 HDB flats were resold in Q4 2021 – down by about 12% from 8,433 units transacted in the previous quarter. The decline is likely due to the Stabilisation Phase of the SMM affecting viewings and sales, and the typically slower market activity towards the end of the year. In 2021, more than 30,000 flats were resold, close to PropNex’s forecast of 30,000 units. We retain our projection of 30,000 HDB resale transactions for 2022 in anticipation of healthy underlying demand for resale flats and the bumper stock of flats that are due to exit the 5-year Minimum Occupation Period in 2022.”