HDB prices spike 12.5% y-o-y in 2021, first double-digit growth in 10 years

Singapore (Edgeprop) – For the whole of 2021, HDB resale prices spiked 12.5% y-o-y, clocking double-digit growth since 2011 when prices increased by 10.7% y-o-y.


HDB resale prices increased by 3.2% q-o-q in 4Q2021, compared to the 2.9% q-o-q growth recorded in the preceding quarter. This is also the seventh consecutive quarterly increase recorded by the market.

In general, the performance of the HDB resale market exceeded expectations in terms of price growth and sales volume this year, says Christine Sun, senior vice-president of research & analytics at OrangeTee & Tie.

“Prices are rising as demand continues to outstrip supply in many areas. On the demand side, the construction delays and long completion periods for new BTO flats may have driven buyers to the resale market,” says Sun.

Some private homeowners took advantage of the robust private resale market to realise the value of their properties and subsequently downgraded to public housing, boosting the overall pool of HDB buyers.

The strong run up in resale prices gave many HDB flat owners some cheer after enduring a fall in resale flat values between 2013 to 2018, says Wong Siew Ying, head of research and content at PropNex Realty. 

“However, such double-digit price growth is unsustainable over the long term. Amid the rising market, we note that a record 255 flats have been resold for at least $1 million in 2021. We expect the pace of HDB resale price growth to slow to between 6% and 8% in 2022 as the new cooling measures are likely to temper the buoyant sentiment in the market,” says Wong.
In addition, HDB has announced that it plans to ramp up the supply of new public housing over the next two years.
Sun expects that the latest property cooling measures will have a limited impact on the HDB resale market. “While most buyers may not be adversely affected by the reduced LTV, buyers may generally be more prudent in their home purchases and could even take the opportunity to negotiate for better prices. Some sellers may start adjusting their price expectations as well,” she says.
Demand in the HDB secondary market is expected to remain robust this year given that construction delays will continue to plague some new public housing developments, says Sun.
“Most sellers may not be in hurry to sell their flats or face financial difficulty to drop prices excessively. As such, we anticipate that prices may continue to grow next year but at a slower pace of between 5 to 8%,” she says.

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