As HDB resale prices rise faster than those of private homes in a buoyant property market, more and more HDB flat owners are snapping up condominium units.
The robust HDB resale market is making it easier for them to upgrade to private housing.
Citing data from the Urban Redevelopment Authority’s (URA) Realis system, JLL said about 7,169 buyers with HDB addresses purchased new and resale private homes in the first three quarters of this year, a jump of over 21% from the same period last year.
Analysts note that this puts the number of new and resale private homes sold to HDB upgraders on track to surpass 2020’s level, with resale numbers potentially hitting a five-year high.
AnjiaSG‘s senior real estate agent, Leo Kwek, said that the rapid rise in HDB resale prices is a key factor. Over the past year, HDB resale prices have risen faster than those of private homes.
HDB resale prices surged by 9.1% in the first nine months of this year, while the URA’s private residential property price index rose by 5.3%.
Leo Kwek stated that many HDB owners, after selling their flats at attractive prices, are upgrading to private residential properties.
Factors driving strong HDB resale prices include economic recovery, lower mortgage rates, and new demand arising from construction delays for Build-To-Order (BTO) flats.
As of October 31, a record 192 HDB flats were resold for S$1 million or more this year. In comparison, 82 such flats were resold in the whole of last year.
Local Singapore property agent Mr. Kwek added: “Given the global economic recovery and a declining supply of new condominiums, some people are buying now because they expect prices to trend even higher.”
According to JLL data, resale condos are more popular among HDB upgraders. About 62% of the 7,169 transactions were made by this group of buyers. JLL Singapore’s Senior Director of Research and Consultancy, Ong Teck Hui, noted that this is because these resale condos are more affordable than new launches.
PropNex, based on private home caveats lodged in the first nine months of this year, reported that 4,212 resale condos were sold to buyers with HDB addresses, a 119% increase from the 1,924 units resold in the same period last year. There were about 13,000 condo resale transactions in total this year.
Meanwhile, PropNex said that the number of new condo units sold to HDB upgraders grew by nearly 26% in the first nine months of this year compared with the same period last year.
The number of private homes sold to buyers with HDB addresses has risen across the board, with the strongest growth seen in the S$1.5 million to S$3 million price range.
Ms. Tricia Song, Head of Research for South-east Asia at CBRE, said: “This figure is more than double that of 2020, and also higher than the levels from 2017 to 2019.”
According to JLL data, 4,967 private homes priced between S$1 million and S$3 million were snapped up by HDB upgraders in the first three quarters of this year, a 109% increase from the same period last year.
Mr. Ong said: “This indicates that Singapore’s private residential market is recovering from the 2020 recession, supported by a buoyant HDB resale market.”
“The aspiration of HDB residents to own private property has been long-standing. The cooling measures implemented in 2018 were not meant to curb this aspiration, but rather to slow the rapid rise in private home prices at that time.”
Leo Kwek stated that these measures helped to cool new launch prices in the second half of 2018 and assisted home buyers on tighter budgets to upgrade their properties.
Analysts point out that given the sweet spot pricing for HDB upgraders is between S$1.1 million and S$1.3 million, most buyers flock to projects in the Outside Central Region (OCR).
Projects such as Treasure at Tampines in Tampines and Midwood have become popular choices, while Normanton Park on the city fringe has the most buyers with HDB addresses.
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