HDB flat prices dip in Q122 'expected': experts

The most prominent reason given was the cooling measures since December 2021.

The Urban Redevelopment Authority (URA) released a flash estimate on 1 April, saying the overall price index for private homes in Singapore increased 0.4% in the first quarter of 2022, slowing from the 5% jump seen in the previous quarter after the government introduced cooling measures in December 2021.

Meanwhile, the Housing and Development Board (HDB) showed that resale prices of public housing flats rose by 2.3% quarter-on-quarter in Q1 2022, moderating from the 3.4% increase in Q4 2021.

PropNex head of research and content Wong Siew Ying said, "The moderation in sales and price growth in Q1 2022 is unsurprising owing to the seasonal lull and as buyers take stock of the market following the introduction of new cooling measures in December. In addition, the tighter supply of resale flats available for sale may also have curtailed transaction volume after a year of robust sales in 2021. Some HDB upgraders could have held back on selling their flat as their new home is not ready for occupation owing to completion delays."

However, according to Huttons, the tight supply situation may be alleviated soon as streamlined measures will make it easier for companies to bring in workers and accelerate the completion of homes. In 2022, an estimated 30,196 flats will meet the five-year MOP, and owners may put up their flats for sale to ride on the momentum. This could be the largest number of flats meeting the MOP since HDB ramped up its BTO supply in 2011. This will help to address the supply imbalance.

Huttons noted these newer homes will command higher prices and underpin price increases in the HDB resale market by up to 8% in 2022. The upgrading demand from the HDB resale market will contribute to higher transaction volume in the private home market.

Looking forward, OrangeTee forecasted middle- and lower-income Singaporeans, who form the bulk of HDB flat purchasers, may be more affected by the higher cost of living. Should inflation worsen, more people may opt for smaller flats or flats in non-mature estates, which tend to be lower priced. OrangeTee also anticipated that resale prices may continue to rise but at a slower pace of between 5% and 8% this year.