HDB resale price growth to slow as public housing classification rehaul kicks off

Prices to slow to 5% this year following the 10.4% spike in 2022.

Resale prices of HDB flats are showing signs of stabilisation and the trend is expected to continue through next year with the new classification system in place, according to Huttons Asia.

Huttons in a note on Monday estimated that HDB resale prices are likely to inch up by 5% for full year 2023, and drastically slow down from the 10.4% jump last year.

Tempering the price growth is the rising supply of new flats as HDB catches up on delayed projects. HDB is seen rolling out as much as 25,000 build-to-order flats next year to stabilise resale prices, after launching about 23,000 flats this year.

In the secondary market, the property agency expects more flats to hit the market next year as more owners either move to a different HDB flat or to executive condominiums. 

“With the impending change in classification of HDB estates and BTO flats from 2H 2024, it is estimated that there may be more demand for resale flats without resale restrictions,” Huttons said.

READ MORE: Buyers are actively seeking HDB resale flats without resale restrictions: expert

HDB resale flat transactions are projected to range from 25,000 to 27,000 units, which could result in resale prices rising even slower at around 3% to 5% in 2024, it said. 

Despite the price slowdown, homeowners are still seen willing to pay top dollar for their preferred homes. 

Huttons sees million-dollar HDB flat transactions to continue to grow to around 460 this year from 369 last year, before climbing further to as high as 500 flats in 2024.

By the second half of 2024, public housing estates will be classified as Central, North, Northeast, West and East regions, while new build-to-order flats will be grouped into their new categories of Standard, Plus and Prime flats. 

The rehaul also comes with stricter rules on resale for Plus and Prime flats in line with the government’s goal of price stability.