The Singaporean housing market is a dynamic landscape, with prices for HDB flats experiencing a significant surge in recent years. The average price for resale HDB flats reached $564 per square foot (psf) in 2023, marking a 6% increase from the previous year and a whopping 27.9% surge since 2014. This upward trend has been fueled by strong demand and increasing household income, leading to a record high of 29,065 resale transactions in 2021.
However, the number of transactions dipped slightly to 26,805 in 2022 and further to 25,990 in 2023. Despite this, the demand for HDB flats remains robust, driven by two government regulations. The first is a 15-month wait period for previous owners of private residential property who wish to buy resale HDB flats as their replacement homes. The second is a longer minimum occupation period (MOP) of 10 years for the upcoming Prime and Plus categories for Build-to-Order (BTO) flats, which could encourage some buyers to turn to the resale market.
In this article, we delve into the HDB towns and regions that have experienced the highest and lowest resale price growth, providing valuable insights for prospective buyers.
West Region Leads the Pack
The West Region emerged as the top performer in terms of price growth, with an impressive 7.2% year-on-year (y-o-y) increase in 2023. This is in stark contrast to the Central Region, which saw the lowest price growth of 5.2% y-o-y. Despite this, the Central Region still commands the highest average price of $684 psf, while the West and North Regions trail behind with average prices of $524 psf and $511 psf, respectively.
Bukit Batok: A Standout Performer
Among the HDB towns, Bukit Batok in the West Region stood out with the highest resale price growth of 14.1% y-o-y in 2023. This is a significant achievement, considering that Bukit Batok is among the top three towns with the highest overall price growth when comparing average prices from 2014, 2021, and 2022. The town's popularity has been bolstered by its proximity to the upcoming Tengah Town and government plans to transform nearby Jurong Lake District into a regional center.
Kallang/Whampoa: A Different Story
On the other end of the spectrum, Kallang/Whampoa is the only HDB town that saw its average price decline by 1% y-o-y in 2023. This could be attributed to weaker demand for resale flats in the town, as evidenced by a decrease in sale volume from 929 flats in 2022 to 790 flats in 2023. The town's popularity may have been overshadowed by the launch of approximately 5,000 BTO flats in the area, diverting potential buyers away from the resale market.
Four-Room Flats: A Popular Choice
Four-room flats are the most transacted flat type and tend to hit the sweet spot between size and affordability for many homebuyers. In Bukit Batok, four-room flats experienced the highest price growth of 13.5% y-o-y in 2023, followed by Bukit Timah with 13% y-o-y growth. In contrast, Clementi saw the lowest price growth of only 1% y-o-y for four-room flats, possibly due to the availability of more affordable BTO flats in nearby Tengah and the transformative plans for the Jurong Lake District.
Summary:
- HDB resale prices have surged by 27.9% since 2014, with an average price of $564 psf in 2023.
- The West Region had the highest price growth of 7.2% year-on-year (y-o-y) in 2023, while the Central Region had the lowest at 5.2% y-o-y.
- Bukit Batok saw the highest price growth of 14.1% y-o-y, followed by Bukit Merah and Bukit Timah.
- Kallang/Whampoa was the only town with a price decline of 1% y-o-y, attributed to weaker demand due to a large number of BTO flats launched.
- Four-room flats in Bukit Batok had the highest price growth of 13.5% y-o-y, while Clementi had the lowest at 1% y-o-y.
Interpretation:
- The HDB resale market continues to be robust, with strong demand and increasing household income driving prices upwards.
- The West Region, particularly Bukit Batok, is experiencing significant growth due to factors like improved connectivity and the completion of MOP for many flats.
- Kallang/Whampoa's underperformance can be attributed to a large number of BTO flats launched, diverting buyers from the resale market.
- Clementi's weak price growth may be due to its higher average price compared to nearby towns and the availability of more affordable BTO flats in Tengah.
The HDB market is a tale of two towns, with Bukit Batok experiencing robust growth and Kallang/Whampoa facing challenges. For prospective buyers, it's essential to consider the factors driving price growth and decline in different towns and regions. By staying informed and understanding the market dynamics, buyers can make more informed decisions and navigate the HDB market with confidence. Stay updated on HDB resale market trends and opportunities by reaching out to our real estate experts. Contact us today for personalized advice and assistance with your property needs.
Source: EdgeProp