Web Stories Thursday, February 22

SINGAPORE: Prices of Housing Board resale flats rose by 4.9 per cent in 2023, a significantly smaller increase compared with the 10.4 per cent price gain in the previous year and the 12.7 per cent growth in 2021.

It also marks the slowest year-on-year increase since 2019 when prices grew by 0.1 per cent.

The full-year figure comes as data released by the Housing and Development (HDB) on Friday (Jan 26) showed that for the fourth quarter of 2023, resale prices rose by 1.1 per cent, lower than the 1.3 per cent growth in the previous quarter.

While some analysts attributed the fourth-quarter figure to the year-end lull, they noted other factors such as the timing of Build-to-Order (BTO) launches in October and December which may have prompted buyers to consider new flats instead.

“The timing of these BTO launches appeared to have a notable impact, capturing the attention of many potential home owners.

“These potential home owners were possibly swayed by the appeal of brand-new flats, (and) might have redirected their interest away from the resale market to explore these newly launched BTO options,” said Mr Mohan Sandrasegeran, head of research and data analytics at Singapore Realtors Inc.

IMPACT OF COOLING MEASURES

Others noted the impact of cooling measures on the demand for resale flats over the months.

In September 2022, the government introduced a slew of measures that included a 15-month wait-out period for private home owners who want to buy HDB resale flats. 

Stricter borrowing criteria and tighter limits for HDB loans were also introduced to ensure prudent borrowing amid rising interest rates.

“The 1.1 per cent quarter-on-quarter (increase) remained below the average quarterly increase of 2.5 per cent observed in 2022 and around 3.1 per cent in 2021, indicating a moderation in HDB resale prices since the implementation of cooling measures in September 2022 and April 2023,” said ERA Singapore’s key executive officer Eugene Lim.

Besides a contraction in housing demand, OrangeTee & Tie’s chief researcher and strategist Christine Sun also cited inflationary concerns and higher interest rates as reasons for the slower growth in prices in 2023.

Ms Sun noted that average prices fell in 12 towns in the fourth quarter, compared with 10 towns in the previous quarter.

“On the other hand, average prices in Q4 grew in 14 towns, which is down from 16 towns in Q3,” she added.

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