SINGAPORE: Fewer Housing and Development Board (HDB) flat upgraders made the leap into private housing for a second straight year as resale flat price growth and the volume of HDB resale transactions tapered, while private home prices and mortgage rates remain high.
This could have implications for the overall market, in particular the suburban market, which is popular with HDB upgraders, as more than 4,400 new condos are expected to be launched in the suburbs in 2024, according to OrangeTee and Tie.
It would account for around 50% of the up to 8,800 new units expected to be launched in the year, the real estate agency estimated.
With Singapore’s private residential prices growing at a slower pace and up to 40 new launches coming onstream in 2024, buyers may stay on the sidelines as they evaluate the options and wait for prices to moderate further.
Already, signs of price resistance have set in as new private home sales, excluding executive condominiums (ECs), sank to a 15-year low of 6,421 units in 2023, even as the number of newly launched units that year jumped to 7,551 units from 4,528 units in 2022.
And while demand from local owner-occupiers for suburban non-landed homes and new launches have fuelled a price rally in this submarket, like J’den in Jurong East which set a benchmark record at S$2,451 per square foot (psf), observers question how long this will last.
Tellingly, the number of HDB upgraders acquiring new and resale private homes has dropped in recent years.
A total of 4,714 new and resale non-landed private homes were bought by those with HDB addresses in 2023, down 25.7% from 6,344 in 2022.
Transactions were down 36.3% in 2022 from 9,960 in 2021, said PropNex, citing the Urban Redevelopment Authority’s Realis data.
In comparison, a total of 9,795 new and resale non-landed private homes were bought by those with private addresses, down 15.3% from 2022’s 11,562, which was down 31.3% from 16,822 in 2021.
For the non-landed resale market, more buyers with HDB addresses appear to be delaying their upgrading plans in hopes of mortgage rates moderating, as the average transacted price of resale homes ticked up to nearly S$1.8mil in 2023 from S$1.76mil in 2022, PropNex chief executive Ismail Gafoor said.
Trading up is getting harder for HDB upgraders as the growth in resale flat prices has not kept pace with that of private residential property prices in 2023.
Chia Siew Chuin, JLL’s head of residential research for Singapore, attributed the drop in private home sales to buyers with HDB addresses to slower resale flat price growth following the ramp-up in the supply of build-to-order flats and recent rounds of cooling measures.
Compared with a 10.4% jump in 2022, HDB resale flat prices gained just 4.9% in 2023. Private residential property prices grew 6.8% in 2023, compared with 8.6% in 2022.
As a result, some buyers with HDB addresses may sit it out in the hopes of lower interest rates in the second half of 2024, or switch to new ECs, priced at around S$1,406 psf in 2023, according to Huttons – a 34% discount to new suburban private property prices.
But even new EC launches have seen slower take-up rates over the past year, as new unit prices rose amid low unsold supply, said Nicholas Mak, chief research officer of property search portal Mogul.sg.
When Copen Grand EC in Tengah Garden Walk was launched in October 2022, 73% of its 639 units were sold at an average price of S$1,300 per sq ft over the weekend.
Three months later, Tenet in Tampines Street 62 sold 72% of its 618 units at an average price of S$1,360 per sq ft.
In August 2023, Altura in Bukit Batok moved 61% of its 360 units at an average price of S$1,433 per sq ft during its launch. — The Straits Times/ANN
