HDB Resale Volume Rose; Record Number of Million-Dollar Flats in August

HDB resale prices inched up marginally in August, continuing the gradual climb but the overall growth momentum is showing signs of slowing. However, 54 HDB flats were resold for at least $1 million in August – setting a new monthly record for such transactions. The resale volume increased from July to August, despite the start of the Hungry Ghost festival in the middle of the month. Based on transaction data, 2,474 HDB flats were resold in August, up by 20.5% from 2,053 units resold in the previous month. When compared to August 2022, the resale volume rose by 7.1% from the 2,309 resale flats transacted a year ago.

The improvement in sales could be due to buyers returning to the market as prices begin to moderate and stabilise. Some flat sellers may also be more willing to negotiate on asking price in view of the cautious market sentiment, and more so if they are getting keys to their new home and hope to sell the flat in order to qualify for additional buyer’s stamp duty remission.

Prices are moving at a more measured pace in recent months, with the average resale price growth of under 1% month-on-month in the last three months. In August, the overall average price of HDB resale flats inched up by 0.1% MOM to $577,475 from $577,166 in July (Chart 1). This is a shade slower than the 0.5% MOM growth in July and the 0.7% increase in June. On a year-on-year basis, the average resale price was up by about 5% from August 2022.

Meanwhile, by flat type, the overall average transacted prices for 4-, 5-room, and executive flats rose by 2.6%, 0.8%, and 1.5% MOM respectively in August. Meanwhile, the average resale price of 3-room flats dipped by 0.5% MOM to $411,538 in August (see Table 1).

Analysing the data by towns and flat types, it is observed that the average resale price of most flat types recorded MOM increase, with the exception of 3-room resale flats across the board, and 5-room flats in non-mature estates (see Table 2). Mature towns posted steeper growth with average resale prices rising by 3.2%, 4.4%, and 4.3% for 4-room, 5-room and executive flats respectively.

In August 2023, mature towns dominated the top 3 lists of estates in PropNex’s ranking of average transacted resale prices on a per square foot basis ($PSF) by flat types (see Table 3). The highest average PSF price for 4-room flats came in at $1,071 psf in Central Area, while the Central Area and Bukit Timah posted the highest average unit resale price for 5-room flats and executive flats in August 2023 at $1,008 psf and $755 psf, respectively.

The prices in the Central Area was mainly driven by eight “million-dollar” which all had unit prices over $1,000 psf. In fact, a 94-sqm 4-room resale flat at Pinnacle @ Duxton which was resold for $1.41 million in August has set a new record unit price for HDB resale flats at about $1,394 psf.

Based on resale transaction data, about 36.4% of resale flats sold in August were priced at below $500,000, slightly up from 35% in July. Meanwhile, about 61.4% of the flats resold in August were transacted at between $500,000 and just under $1 mil – down from the 63.4% in the previous month. The proportion of resale flats sold for at least $1 million accounted for about 2.2% of August’s sales, rising from 1.6% in July 2023 (See Chart 2).

There were 54 resale flats sold for at least $1 million in August – up by about 69% from 32 units in July and is a new monthly record high. In the first eight months of 2023, the market saw 294 “million-dollar” HDB resale flats changing hands, reflecting a 26.7% increase from the corresponding period of 2022, where 232 such flats were resold. The figure is now just 75 units shy of the record sales of 369 “million-dollar” resale flats in full-year 2022 – which could potentially be breached by November 2023, given an average of about 37 such transactions per month this year.

Of the 54 “million-dollar” flats resold in August, four of the transactions are in non-mature towns – two each in Woodlands and Hougang. The remaining units are located in 13 mature estates namely, Bukit Merah (9 units), Central Area (8), Kallang Whampoa (6), Ang Mo Kio (6), Queenstown (4), Toa Payoh (4), Bukit Timah (3), Clementi (3), Marine Parade (2), Bishan (2), Tampines (1), Serangoon (1), and Geylang (1).

The priciest HDB resale flat transacted in August was a 5-room flat at Pinnacle @ Duxton, which fetched $1.48 million. The unit spans 107 sqm (1,152 sq ft) and is located between the 28th and 30th storey. The second most expensive unit sold in the month is in Lorong 1A Toa Payoh, being a 114-sqm (1,227 sq ft) 5-room DBSS flat on the storey ranging from the 40th to 42th floor – it was resold for $1.46 million (see Table 4).

Meanwhile, the third most expensive flat resold in August smashed the unit price record for resale HDB flats. The 94 sqm (1,012 sq ft) 4-room flat at Pinnacle @ Duxton in Cantonment Road fetched $1.41 million and achieved a record unit price of about $1,394 psf.

Looking at the rising number of “million-dollar” flats and their widespread locations across numerous estates, it makes sense for the HDB to reclassify new flats under the Standard, Plus, and Prime framework from 2H 2024. This will better reflect flat values depending on their specific location attributes and ensure affordability and fairness for Plus and Prime flats, owing to the tighter restrictions and subsidy clawback.

With the new reclassification of new flats, some buyers who are looking for choice locations but are not willing to endure the longer 10-year minimum occupation period and stricter resale conditions could find the HDB resale flats – which are not subjected to the new framework - more attractive. PropNex expects the interest in well-located resale HDB flats to remain healthy, including those that are likely to be situated close to the future Plus/Prime flats.

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