SINGAPORE: The Housing Development Board (HDB) resale market experienced a slowdown in November, attributed to recent Build-to-Order (BTO) launches and ongoing government cooling measures, according to property analysts.
Resale transactions dropped by 9.6% compared to October, with 1,951 units sold. This marks the first time in over a year that monthly resale volumes have fallen below the 2,000-unit threshold.
Speaking with Singapore Business Review (SBR), Wong Siew Ying, Head of Research and Content at PropNex, pointed to several contributing factors. The reduced loan-to-value (LTV) limit for HDB loans introduced in August has curbed buyers’ borrowing capacity, impacting resale demand. Additionally, the year-end period typically sees slower market activity.
Another significant factor was the October launch of approximately 8,500 BTO flats, many in desirable locations. Wong noted that the substantial supply likely diverted potential buyers from the resale market.
Mark Yip, CEO of Huttons Asia, echoed these observations, emphasizing to SBR that buyers increasingly prefer flats in mature estates, which are not subject to restrictions tied to Plus and Prime flats. This preference has resulted in faster price growth in mature estates compared to non-mature ones.
The number of million-dollar flat sales also fell, with 87 such transactions in November compared to 103 in October. This decline highlights a shift in market dynamics, as affordability concerns and new measures temper high-end resale demand.
Despite the recent slowdown, analysts remain optimistic about the HDB resale market’s resilience. PropNex projects resale volumes for 2024 to range between 26,000 and 28,000 units, while Huttons estimates a slightly higher range of 29,000 to 30,000 units.
Resale prices are expected to grow by 8% to 10% this year, supported by stable demand and market fundamentals. As buyers continue to navigate the evolving landscape, the interplay between government policies, BTO supply, and buyer preferences will shape the market’s trajectory.