Analysts are expecting the HDB market to remain steady this year, with a price increment of at best 1%. This is despite 71 HDB flats selling for above $1 million last year.
HDB resale prices at a 7-year low
Resale HDB flat transactions rose by 4.6% last year, with 23,099 units sold compared to the 22,077 in 2017.
There was also a record number of HDB units going for $1 million or more. Analysts caution against wishful thinking in the resale HDB flat market as these high-value transactions are rare and few in between.
Most of these transactions were for units built under the now-defunct Design, Build and Sell Scheme (DBSS) such as The Peak in Toa Payoh, Pinnacle@Duxton or rare terraced units such as those in Stirling Road or Jalan Bahagia.
Across the board, resale flat prices fell 0.9% last year with prices falling 0.2% in the last quarter. Prices of resale flats are expected to grow at most by 1% this year as buyers remain conservative.
See more: The ups and downs of the rental market
2018’s price decrease gentler than that of 2017
The government’s recent rhetoric about the depreciating value of older HDB flats has also gotten buyers nervous about paying more than what a flat is valued at. This is a far cry from the market’s peak in 2013 when cash-over-valuations were almost a given.
The exponential increase in the number of flats crossing the $1 million mark, however, has market players considering a widening gap between HDB market segments.
In 2017, there were only 46 such transactions and in 2014 only 2. The rise in transactions could be attributed to the influx of newer HDB units which have just reached their minimum occupation period into the market.
15,000 new HDB flats are expected to launch this year with the first exercise in February.