PUBLIC housing resale prices kicked off the year with gains, rising 1.5 per cent in January from the previous month in tandem with the seasonal volume surge.

Christine Sun, chief research and strategist at OrangeTee & Tie, noted that this was the first time that prices rose by more than 1 per cent on the month since April 2023.

Based on flash data by SRX and 99.co released Tuesday (Feb 6), the surge in Housing and Development Board (HDB) prices from the previous month was driven by a growth in prices in both mature (1.1 per cent) and non-mature (1.5 per cent) estates.

Prices for all room types increased over December 2023 levels, with five-room flats booking the largest increase at 2.1 per cent, followed by three-roomers at 1.7 per cent, four-room flats by 0.9 per cent, and executive units by 0.8 per cent.

Sun attributed the price increase for five-room flats in January 2024 to a surge in demand, which was “within expectations” given anticipation that demand for large flats would likely rise this year.

“This is because the first batch of private residential property owners who intended to buy HDB resale flats would have completed their 15-month wait-out period from January this year, since the rule’s implementation in September 2022,” she said.

“Some of these private home downgraders may have the financial means to purchase a bigger flat, while others could find it more ‘worthwhile’ to buy a large unit for the rental expenses incurred or effort spent in fulfilling the wait-out period.”

Likewise, Huttons Asia’s chief executive Mark Yip noted that an increase in the supply of HDB flats for the month resulted in more closings and higher sales by giving buyers more choices.

He estimates that 5 to 10 per cent of buyers for the month were former private property owners, who may have pushed up sales of five-room and executive flats.

Year on year, HDB resale prices increased 5.7 per cent with prices for all room types rising across the board with prices in mature estates increasing by 5.4 per cent, and another 5.5 per cent in non-mature estates.

The year-on-year price growth was again led by increases in prices for five-room units (6.4 per cent), followed by four-roomers (5.5 per cent), executive units (5.2 per cent) and three-roomers (4.6 per cent).

There were 2,629 HDB resale flats transacted in January 2024 – representing a 30.8 per cent increase from the previous month, and 2.1 per cent higher than in the previous year.

Breaking it down by room type, the majority or 45.6 per cent of volumes came from four-roomers, while 24.1 per cent were for three-room flats. Another 23.8 per cent of volumes were for five-room units, and 6.5 per cent from executive flat types.

By estate, 62.3 per cent of January’s resale volumes came from non-mature estates, with the remaining 37.7 per cent from mature estates.

More million-dollar flats expected for 2024

Luqman Hakim, chief data and analytics officer at 99.co, noted that the month’s overall volumes exceeded 2023’s all-time high levels: “Historically, January has always been a strong month for resale volume and this year is no exception.”

Based on his observations, the 74 million-dollar resale flat transactions booked in January 2024 was 37 per cent higher than the previous all-time high achieved in August 2023. It also represented an increase from the 48 such units transacted in December 2023.

The number of million-dollar flats sold in January 2024 comprised 2.8 per cent of total resale volumes in the month, led by Bishan (13) and Bukit Merah (10).

The rest of the million-dollar flats that went for at least S$1 million came from Toa Payoh, Kallang Whampoa, Ang Mo Kio, Queenstown, Clementi, Bukit Timah, Serangoon, Hougang, Central Area, Geylang, Bedok, Woodlands, Tampines, Pasir Ris and Punggol.

The highest transacted price for a resale flat in the month was achieved at S$1.57 million for a five-room flat in Toa Payoh. Within non-mature estates, an executive apartment at Punggol Field sold at the highest price tag of S$1.1 million.

“At this rate, there may be more than 500 million-dollar flats in 2024 compared to 470 in 2023,” said Yip of Huttons.

The chief executive noted that this also represented the first time an HDB resale flat had “broken the barrier of S$1.5 million”.

“Many sellers are pushing the boundary by asking more for their HDB resale flat. A 3NG (New Generation) flat at Tiong Poh Road is asking S$1.99 million, and a couple of executive masionette flats at Bishan Street 22 are priced from S$1.9 million,” he observed.

In a similar vein, ERA Singapore’s key executive officer Eugene Lim foresees the number of million-dollar resale flat transactions potentially doubling in 2024 to beat the record of 470 of such flats transacted in 2023.

“With higher private home prices, the softer economic outlook, rising retrenchment numbers and the elevated interest rates, homebuyers who are playing it safe may be looking for homes in the HDB resale market instead.”

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Credit : THE BUSINESS TIMES