For those of us who’ve been looking for a HDB, the dilemma is eternal: BTO or resale? And with the recent delay in BTO construction due to the pandemic, the faster resale option has started to look increasingly attractive.
Alas, prices have surged in parallel with demand, with resale price hikes seen across mature and non-mature neighbourhoods. Here’s a look at what it means for those looking to snap a resale flat up.
Increase based on Resale price index (RPI)
According to HDB’s Resale Price index, prices have shot up over the course of 2021, with the index jumping from 138.1 in the last quarter of 2020 to 155.7 in the last quarter of 2021.
That’s a jump of around 12% within a single year and is decidedly not par for the course, as the jump from the end quarters of 2019 to 2020 was only 5% (from 131.5 to 138.1). That’s the largest jump in over ten years!
If you delve deeper into 2021, prices have also risen consistently around 3% every single quarter.
Resale prices increase by neighbourhood
Both mature and non-mature estates alike have shown growth over the last year as well.
Derived from records of recorded transaction prices from HDB Resale Flat Prices
As compared to the same period in 2020, popular mature estates like Tampines and Bishan have shown over 7% hike in offered resale prices.
HDB 3-rooms in non-mature, yet upcoming towns such as Sembawang also showed a whopping 15% increase in overall resale prices.
Besides the average rising, the top end of the curve also reached new heights. For instance,
according to property platform SRX, the number of million dollar flats sold increased from 82 to almost three times as much with 261 such flats sold in 2021.
Cooling measures and supply increases
To curb the price rises of the extremely hot housing market, the government has announced a slew of cooling measures in December 2021.
This includes an increase in the Additional Buyer’s Stamp Duties (ABSD), which is a levy that Singaporeans need to pay on their second residential property and beyond, and which foreigners need to pay on all residential properties. This is mainly to dissuade buying property for investment purposes, which could jack up housing prices across the board.
Other measures include tighter loan-to-value (LTV) limits which means the maximum loan you can take is lower, as well as lower Total Debt Servicing Ratios (TDSR), which is a percentage-based amount of cash that financial institutions can lend you.
But besides cooling demand, the supply side is not shirking, either. According to HDB, there are plans to launch up to 23,000 new BTO flats over 2022 and 2023. Plus, this will be across mature and non-mature towns. BTO, ai mai yet?
Resale HDB flats vs BTO
Even though prices have increased, the long wait for BTO has pushed many over to the resale camp. This is especially so when you factor in additional rent if you don’t fancy staying with your in-laws or at home after your wedding, which adds to the downsides of waiting for your perfect BTO flat.
Regardless of your choice, we hope you’ll be able to find the house of your dreams through the peaks and valleys of the property market. Here are some resources that might help:
Cover image adapted from: AGCDesign, Calvin Teo
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