SINGAPORE – Prices of Housing Board resale flats rose by 4.8 per cent in 2023, slower than the 10.4 per cent increase recorded in 2022. In 2021, prices surged by 12.7 per cent.

In the last three months of 2023, prices rose by 1 per cent, flash estimates from HDB showed on Jan 2.

This marks the 15th consecutive quarter of price increase since the second quarter of 2020.

Even so, resale prices increased at a slower pace in the fourth quarter of 2023 than in the third quarter, when prices were up by 1.3 per cent.

HDB noted that the price growth in the last quarter of 2023 was lower than the average quarterly growth of 2.5 per cent in 2022.

Property analysts said the mismatch in price expectations between buyers and sellers, as well as lasting effects of property cooling measures, led to further stabilisation in the resale market in the fourth quarter.

These measures include a 15-month wait-out period introduced in September 2022 for private property owners who wish to buy an HDB resale flat. The loan-to-value limit, the maximum one can borrow to fund a housing purchase, for HDB loans was also lowered twice – from 90 per cent to 85 per cent in December 2021, and to 80 per cent in September 2022.

Real estate firm PropNex’s head of research and content Wong Siew Ying noted that the quarterly price growth in 2023 did not cross the 2 per cent mark.

“This is a noteworthy trend, given that the pace of price growth in each quarter had been well over 2 per cent or 3 per cent between the fourth quarter of 2020 and the fourth quarter of 2022,” she added.

“The implementation of various cooling measures in September 2022 has taken the wind out of the sails, and HDB resale prices are now growing at a considerably slower clip.”

Fewer HDB resale flats were sold in the fourth quarter of 2023, with the number falling by 2.3 per cent to an estimated 6,440 units, from 6,592 units in the third quarter as at Sept 28.

It is also the lowest volume lodged in the fourth quarter, compared with the same period from 2020 to 2022.

Ms Christine Sun, senior vice-president for research and analytics at real estate firm OrangeTee & Tie, said the more than 12,000 Build-To-Order (BTO) flats launched across two sales exercises in October and December 2023 could have shifted demand from the resale market.

“This figure is double the usual number of new flats released per quarter,” she noted. This was due to the August launch being delayed until October.

Ms Sun said many new flats launched in the fourth quarter of 2023 were in attractive locations, with some having shorter waits.

For instance, four-room flats at Sin Ming Residences in Bishan, which had the shortest wait in the December launch at about two years and eight months, were over-subscribed, with more than three first-time applicants vying for each available unit.

In all, 26,628 resale flats changed hands in 2023 as at Dec 28, 3.8 per cent lower than the 27,686 flats in 2022.

Mr Lee Sze Teck, senior director of data analytics at property firm Huttons Asia, said an estimated 468 flats changed hands for at least $1 million in 2023, 26.8 per cent higher than the 369 million-dollar deals in 2022.

A record per sq ft (psf) price was also set in December.

A four-room, 93 sq m unit between the 46th and 48th storeys at The Pinnacle@Duxton in Cantonment Road changed hands for $1.41 million, or $1,409 psf – the highest psf price recorded for a resale HDB flat to date, Mr Lee said.

Property firm ERA Singapore’s key executive officer Eugene Lim said the number of four-room flats sold for at least $1 million more than tripled in 2023, with 125 transactions lodged, compared with 38 in 2022.

“Many of these million-dollar flats possess similar qualities that buyers value, such as a longer remaining lease, a larger floor area, and are located near transport nodes or amenities,” he added.

Ms Wong said she expects the number of million-dollar flats to remain elevated as former private home owners who have fulfilled their 15-month wait-out period trickle back into the resale market.

Ms Sun said a significant drop in resale prices is unlikely in the near term because fewer flats will be available for resale. The number of flats reaching their five-year minimum occupation period is set to fall from 15,549 units in 2023 to 11,952 units in 2024.

“Nevertheless, the increase in BTO supply can help address the supply-demand imbalance and prevent further escalation of resale prices, leading to better price stability in the long term,” she said.

The authorities have pledged to launch 100,000 BTO flats from 2021 to 2025. Between 2021 and 2023, about 63,000 BTO flats were launched. This means about 37,000 are set to come onto the market in 2024 and 2025.

HDB launched 22,780 BTO flats for sale in 2023. It has not disclosed the total number of flats that will be launched in 2024.

It said on Jan 2 that median application rates among first-time applicants for three-room and larger BTO flats have been moderating.

The rate in October’s sales exercise was 0.9, and in December, it was 0.8, meaning that more first-time applicants are set to get a chance to select a unit.

These were significantly lower than application rates during the Covid-19 pandemic from 2020 to 2022, which ranged from 2 to 6.8, HDB noted.

Nearly 4,100 flats will be launched in Bedok, Queenstown, Choa Chu Kang, Hougang, Punggol and Woodlands in the next BTO sales exercise in February.