Singapore’s public housing prices hit record-high after growing 2.7% in Q3

Construction delays in Build-to-Order projects have driven homebuyers to the HDB resale market  

As reported on Channel News Asia, resale prices of public housing flats in Singapore are expected to continue rising over the next few quarters, but at a calmer pace compared to this year.  

According to flash estimates released by the Housing and Development Board (HDB), resale prices reached a record high after increasing 2.7 percent in Q3 2021. 

Due to construction delays in Build-to-Order (BTO) projects, homebuyers have gone after the HDB resale market, growing prices by 8.9 percent since the start of the year.  

Analysts predict Q4 2021 to see similar price increases, bringing growth for the entire year to 10 to 12 percent.  

Christine Sun, senior vice-president of research and analytics at real estate firm OrangeTee & Tie, said this would mark one of the “fastest gains” since 2020 when prices jumped by 14.1 percent.  

Describing the market as “sticky”, Dr. Lee Nai Jia from the Institute of Real Estate and Urban Studies (IREUS) at the National University of Singapore added that the recent price increases may generate even higher offers from buyers. 

“Because in the past, the perception is that probably these (increases) will go off, so buyers will resist the increase in prices from sellers. But seeing the prices continue to increase, buyers may be triggered to act and pay a much higher price,” said Dr. Lee. 

Nevertheless, experts expect the pace of growth to slow down.  

Some signs are already emerging, as Dr. Tan Tee Khoon, country manager of PropertyGuru Singapore, said the 2.7 percent increase predicted for Q3 2021 is lower than the numbers from previous quarters.  

“From Q4 2020 to Q2 2021, the HDB Resale Price Index has consistently grown by at least three percent each quarter,” he said. 

Moreover, Dr. Lee from IREUS said that the reopening of borders next year could revive BTO construction, impacting the demand for resale flats.  

Experts added that authorities will be keeping a close eye on the market, as the current pace of growth is not sustainable long-term. However, intervening now with cooling measures could do more harm than good.  

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“The economy is still in (early) stages of recovery, and any cooling measures may rock the boat and lead to even more unforeseen implications,” said IREUS’ Dr. Lee. 

“I think the best way now is maybe to just wait out for the supply situation, rather than implementing certain capital gains kind of measures that will have short-term and long-term disruptions to recovery,” he noted.