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HDB prices increase 12.7% y-o-y in 2021, highest growth since 2010

Atiqah Mokhtar
·4-min read


Credit: Samuel Isaac Chua/The Edge Singapore

SINGAPORE (EDGEPROP) - The HDB Resale Price Index (RPI) increased 3.4% q-o-q in 4Q2021, growing at a faster pace than the 2.9% q-o-q growth charted the previous quarter, according to data released by HDB on Jan 28.

Read also: Getting a flat (and your priorities) right

The RPI for the whole year of 2021 registered an increase of 12.7% y-o-y, its highest growth since 2010, when prices grew by 14.1%.

The HDB market was underpinned by a limited supply of new flats and intense competition among home buyers which drove prices of resale flats to historic highs, says Christine Sun, senior vice-president of research & analytics at OrangeTee & Tie.

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7,940 resale transactions were recorded in 4Q2021, down 5.8% q-o-q from 8,433 units in 3Q2021. Nicholas Mak, ERA Realty’s head of research & consultancy, attributes the decline to seasonal factors. “The HDB resale volume in the last quarter of each year is usually lower than the third quarter. However, the 4Q2021 HDB resale transactions were 3.9% higher than the corresponding period a year ago,” he points out.

For the whole of 2021, 31,017 resale transactions were inked, 25.3% higher than in 2020. This is the highest resale volume since 2010 when 32,257 units were sold.

Sun notes a record-high number of million-dollar HDB flat transactions in 2021. 259 such transactions were logged, triple the 82 transactions in the preceding year. This includes the priciest flat ever sold - a five-room HDB DBSS flat in Bishan which sold for $1.36 million last December.

“In 2021, 40 resale flats transacted for at least $1.2 million, which is a whopping 5.7 times increase from seven units in 2020. Three of such units were transacted in 2019. Of the 40 million-dollar flats, two were above $1.3 million,” Sun comments.

In terms of the rental market, approved applications to rent out HDB flats rose by 1.3% to 10,551 units in 4Q2021. For the whole of 2021, 42,623 units were recorded, 9.9% more than the 38,798 units in 2020.

Looking ahead, ​​despite the recent cooling measures and planned increased in new flat supply, the HDB resale market is expected to continue doing well in 2022, albeit at a slower pace.

PropNex head of research and content Wong Siew Ying says demand will continue to be underpinned by Singaporean households and first-time home buyers, particularly those who do not wish to wait for up to 5 years for their new flat to be completed.

In addition, supply chain bottlenecks and delays in the construction of HDB BTO flats would likely not be fully resolved this year, further supporting demand for HDB resale flats, especially in the first half of the year. (Find HDB flats for rent or sale with our Singapore HDB directory)

PropNex projects that HDB resale prices could see a more moderate 6% to 8% increase this year, with resale volumes potentially coming in at around 30,000 flats.

OrangeTee & Tie’s Sun Sun is estimating around 25,000 to 28,000 resale transactions this year, as well as growth in HDB resale prices by 5% to 8%.

“Slower price growth is on the horizon as the recent run-up in prices is not sustainable. An impending rise in bank mortgage rates and inflation may limit buyers’ affordability. Moreover, buyers taking HDB loans will face tighter restrictions as their LTV has been lowered from 90% to 85% after the implementation of new cooling measures,” she remarks.

In addition, she notes that a record number of flats will reach their five-year minimum occupation period (MOP) this year, which may lead to more flats being put on the market for resale.

Nonetheless, she also anticipates more million-dollar flat transactions this year, given that some 5,000 MOP flats are located in locations with higher prices such as Bukit Merah, Queenstown, Ang Mo Kio, Toa Payoh and Clementi.

Meanwhile, HDB rental demand is poised to pick up further this year. “We estimate that overall rents may rise by 7% to 10%n 2022, while volumes may increase around 9% to between 46,000 and 48,000 units,” says Sun.

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