SG Buildings

SINGAPORE: Singapore’s economic landscape in 2023 witnessed significant shifts influenced by global and local factors.

Data from the Real Estate Year End Market Review 2023 of 99.co shows the million-dollar flats becoming a norm, HDB resale volume returning to levels before the pandemic, and government initiatives helping stabilise property prices.

Condo and HDB Price Trends

The year saw a year-on-year price growth of 4.0% for HDB, significantly lower than the 7.7% in 2022. HDB prices have also continuously progressed since 2020, with transaction volume staying relatively stable. Condo prices have consistently risen since 2020, although there has been a gradual decline in transaction volume.

Condo
Photo: 99-SRX
HDB
Photo: 99-SRX

Resale Market Performance

  • RCR (Rest of Central Region) witnessed declining transactions for HDBs, condos, and landed properties from 2022 to 2023.
  • CCR (Core Central Region) experienced decreases, notably in condo transactions.
  • OCR (Outside Central Region) showcased a significant drop in HDB and landed property transactions and a notable decline in condo transactions.

Resale Volume

The year 2023 witnessed a consistent drop in resale transactions across all regions and residential property types.

  • OCR: HDB transactions decreased by 5.5%, and landed property transactions dropped by 37%.
  • CCR: HDB transactions decreased by 16.5%, condo transactions by 22.3%, and landed property transactions by 19.6%.
  • RCR: HDB transactions decreased by 15.3%, condo transactions by 16.5%, and landed property transactions by 30%.
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Government Intervention

Stringent cooling measures played a role, with the Loan-to-Value (LTV) limit for HDB housing loans reduced to 80%, and a 15-month wait-out period was imposed on private residential property owners aiming to buy non-subsidised HDB resale flats.

HDB also implemented a new flat purchase process from May 9, 2023, introducing the HDB Flat Eligibility (HFE) letter, replacing the HDB Loan Eligibility (HLE) letter. This change temporarily affected transaction volume in June as people adjusted to the new process.

In addition, stricter policies in the Oct 2023 BTO exercise penalised first-timers who declined to book a flat, losing their priority status for one year.

Condo prices grew by 8.4%, slower than the previous year’s 9.1%. Government policies also played a role, with Buyer Stamp Duties (BSD) rates increasing by 2% in February and Additional Buyer Stamp Duties (ABSD) rising by 60% for foreigners in April.

Rise of Million Dollar Flats

There is also a 25% increase in million-dollar flats, constituting 1.8% of total HDB transactions in 2023. Seven resale flats breached the S$1.4 million mark, with the highest transaction at S$1.5 million.

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Million dollar HDB flats
Photo: 99-SRX

18 out of 26 towns reached their all-time high (ATH) this year, with only 3 towns not reaching the million-dollar mark. In Nov, the highest resale transaction was worth S$1,568,888 at The Peak, Toa Payoh.

The expiration of the wait-out period for ex-private residential property owners is anticipated to drive an influx of buyers with substantial purchasing power, potentially setting the stage for further price escalations in the premium segment of the HDB resale market.

HDB Resale Volume

The HDB resale volume declined by 10.9% in 2023 compared to 2022, returning to pre-COVID levels. The government’s commitment to increasing BTO supply to 100,000 by 2025 aims to address housing demand, launching 22,780 flats for FY 2023.

HDB resale volume
Photo: 99-SRX

Strategies like locking ex-private residential property owners out of the HDB resale market and implementing waiting-out periods are intended to modulate volume and curb demand. However, the gradual re-entry of these buyers next year could influence prices in the premium market sector.

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What to Expect in 2024

1. In the private homes sector, the number of completions obtaining Temporary Occupation Permit (TOP) is expected to sharply decrease from 21,125 units (excluding executive condos) in 2023 to approximately 7,526 units in 2024

Largest Development Including EC Obtaining TOP (Temporary Occupation Permit) in 2024
Photo: 99-SRX

2. The condo market is expected to experience slowed growth of 5-7% in 2024, down from the estimated 8.4% in 2023.

3. Anticipation surrounds the introduction of a new housing classification by HDB, with the first BTO scheduled for the second half of 2024. This could reshape the real estate landscape, offering potential advantages in Plus locations.

4. As living costs rise, many Malaysians working in Singapore are opting for accommodation in Johor. With more housing supply available, the volume of Private residential property owners (PPOs) is expected to decrease.

The good news is the government is actively addressing housing dynamics through initiatives like the 3-month stay service apartments by the URA and temporarily raising the rental occupancy cap from six to eight individuals for larger HDB flats and private properties, effective Jan 22, 2024, to Dec 31, 2026. /TISG