Slower HDB Resale price growth in March 2022
HDB resale prices rise at slower pace of 2.4% in Q1 as signs of price resistance set in
The Straits Times, 22 Apr 2022, Fri 11:38 am
By Michelle Ng
Buyer resistance could be setting in, with prices in the Housing Board resale market rising at a slower pace of 2.4 per cent in the first quarter of this year, compared with 3.4 per cent in the fourth quarter of 2021.
Last year, the HDB resale market ended on a high, as prices grew 12.7 per cent, the steepest full-year climb since 2010.
To curtail the robust property market and encourage greater financial prudence, the authorities introduced fresh cooling measures at the tail-end of 2021.
Since then, prices have expanded at a slower pace and the sales momentum of HDB resale flats has slipped, data released by HDB on Friday (April 22) showed.
While prices have continued to go up for the eighth consecutive quarter, the slower rate of 2.4 per cent in the first quarter could be a sign that some price resistance is forming, said property analysts.
Ms Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, said this quarter marks the lowest growth since the third quarter of 2020, when prices rose 1.5 per cent.
With the potential interest rate hikes and rising inflation, the run-up in flat prices may further lose steam this year as buyers become more unwilling to pay more for housing.
"Middle- and lower-income Singaporeans, who form the bulk of purchasers of HDB flats, may be more affected by a rising cost of living. As people spend more on basic necessities and allocate more budget to other expenses, they may be reluctant to pay top dollar for resale flats," she added.
"As a result, buyers may be more price-sensitive and select cheaper homes, such as smaller units or those further from the city centre," she said.
A total of 6,934 HDB resale flats changed hands in the first quarter of this year, down 12.7 per cent from the 7,940 in the fourth quarter of last year.
Compared with the first quarter of last year when 7,581 HDB resale flats were sold, transactions were 8.5 per cent lower.
"This is the first time in nearly two years that sales volume dipped below 7,000 units," said Ms Sun, noting that the previous low was 3,426 in the second quarter of 2020 during the Covid-19 circuit breaker when the market was badly impacted.
Mr Nicholas Mak, head of research and consultancy at ERA Realty Network, said the dip in volume could be due to seasonal factors such as the Chinese New Year lull period.
Another reason could be the current low supply of HDB resale flats on the market, he added.
"Although the demand for resale flats remains strong, some owners are reluctant to sell their flats as they are either unable or unwilling to pay more for their next housing due to the increase in prices," said Mr Mak.