HDB Resale Prices Set To Drop In Final Quarter Of 2022 Thanks To The Recent Cooling Measures

4 October 2022 | BY

With the new cooling measures being implemented on the 30th September, HDB Resale Prices are expected to fall in the last quarter of 2022.

HDB Resale Prices Set To Drop In Final Quarter Of 2022 Thanks To The Recent Cooling Measures

Over the past two years or so, prices in the HDB resale market have done nothing but climb continually. Back in April, the HDB Resale Price Index had increased an average of 2.94% quarter-on-quarter since 1Q 2021, and ever since December 2021, that very same index has increased by more than 5% as of June 2022. This prompted the government to introduce a new set of cooling measures that kicked into effect on 30th September. Hopefully, the new measures will be able to control the craziness in the market, and to ensure that everyday Singaporeans don’t have to break the bank just to afford a home here in Singapore.

On 3rd October, HDB dropped a flash estimate for the Resale Price Index for 3Q 2022, which may help give us an indication of what to expect now that the new cooling measures are in place. If you’re considering getting a resale flat in the near future, here’s what you need to know.

Further increase in HDB resale prices

According to the HDB’s flash estimate for 3Q 2022, HDB resale prices saw an increase of 2.4%, up from the previous quarter. 

Image adapted from:

While this is yet another increase, the index growth is actually slower as compared to previous quarters. The change matches the 2.4% growth from 4Q 2021 to 1Q 2022 – the lowest in over 2 years –  which may be attributable to the cooling measures introduced in December 2021.

On the whole, there’s still a net increase in the overall price index of HDB resale flats. As you can see from the graph below, it’s been nothing but up since 3Q 2020.

Image adapted from: HDB

Why the continual increase?

This continual increase in HDB resale prices can be attributed to a couple of reasons. For one, there have been more private property homeowners choosing to downgrade to a resale HDB flat. There are a few possible reasons for them doing so, such as either cashing in the profits they accrued from their private property in a burgeoning property market, or simply wanting to downgrade and enjoy more disposable income in their pockets. There’s a high possibility that this attributed to the latest set of cooling measures are tailored to them, such as having a new 15-month wait-out period for those looking to downgrade from private property to resale flats.

Another reason for the influx of buyers to the resale market this past year is due to construction delays of BTOs. In short, people who would have otherwise gone for a BTO decided to instead pour money into a resale HDB, due to the longer than usual waiting times for a BTO to be completed thanks to the pandemic. 

Now that we’re in the clear, there’s a chance that future home-buyers would turn back to the BTO market, leading to a lower demand for resale HDBs, and conversely, slower growth in HDB resale prices.

What can we expect for the next quarter?

Since the latest cooling measures were only introduced on the last day of September – also the end of 3Q 2022, it naturally wouldn’t have had any effect on the 3Q 2022 Resale Price Index data. We’ll only know the effect of these measures when the HDB releases the 4Q 2022 data, sometime in January next year.

Image credit: ZR Lin

If past data is anything to go by, we can probably still expect an increase in HDB resale prices, but slower growth as compared to the current quarter-on-quarter growth. After all, the last time that cooling measures were introduced was in December 2021, which resulted in slower growth in resale prices that following quarter.

The latest cooling measures are also pretty significant, because it’s meant to be targeted at curbing demand, rather than supply.

What we mean by this is that the new measures would effectively curtail people’s ability to purchase a property here in Singapore. Since people would now have to pay more upfront as a result of a tighter loan-to-value limit and also less borrowing capacity due to a stricter Total Debt Servicing Ratio (TDSR), they would thus have to think twice before committing to a purchase. 

This would theoretically lead to less overall demand in the market. This is also different from previous cooling measures that aimed at curbing supply, such as introducing a higher Sellers’ Stamp Duty, or introducing a longer MOP period.

To conclude, it’ll be safe to say that the recent cooling measures will definitely have an effect on HDB resale prices moving forward. While it is unlikely we’ll see a reversal in trend to have resale prices drop, what will be more plausible is to have slower overall growth, or at best, to have prices stay flat for the next quarter.

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Cover Image Adapted from : HDB, @joosenghouse 

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