The property market for HDB upgraders in 2023 is likely to be affected by a number of factors, including economic conditions, government policies, and demographic trends.
On the economic front, the property market is closely tied to the overall health of the economy. A strong economy is typically characterized by low unemployment and high GDP growth, which can lead to increased demand for housing. However, an economic downturn can result in a decrease in demand for housing and a decrease in property prices.
The property market in Singapore has seen three key highlights in 2022.
The first highlight is the increase in prices of mass market (or Outside Central Region) new private homes, with prices above $2,000 psf to even $2,500 psf.
The second highlight is the robust sales of new launches, with many achieving sales of 75% to 90%.
The third highlight is the remarkable pick-up in the home leasing market, with rentals rising by 8.6% from Q2 to Q3 2022, and climbing by 20.8% in Q3 from the end of 2021.
In terms of government policies, the government has implemented various measures to cool the property market in recent years, such as increasing the Additional Buyer’s Stamp Duty (ABSD) for second-time buyers and tightening loan-to-value (LTV) limits. These measures are likely to continue in 2023, which could affect the demand for housing and property prices.
In regards to the HDB market, it is likely that the demand for resale flats and flat prices will hold in 2023, despite the September 2022 cooling measures. HDB resale prices are projected to climb by 6% to 8% in 2023 and transaction volume to be around 27,000 to 28,000 flats.
The 3% interest rate floor and lowered loan-to-value limit to 80% for HDB loans are manageable for buyers, and the temporary 15-month wait-out period for private home sellers will trim demand slightly, particularly for larger flats in prime areas and “million-dollar” resale flats.
However, overall HDB resale demand will stay relatively stable, driven by buyers who have more pressing housing needs, those who are priced out of the private residential market, as well as families who are not keen to wait too long for new BTO flats to be completed.
Another important factor to consider is the demographic trends of Singapore. The population is ageing, which could lead to a decrease in demand for housing as the number of first-time buyers decreases. Additionally, the population is becoming more diverse, which could lead to changes in demand for different types of housing and in different locations.
In summary, for HDB upgraders who are looking for more affordable options, the resale market may be a better choice as prices have not risen as quickly as new private condo launches.
Additionally, a number of EC projects will exit the 5-year minimum occupation period in 2023, and some of these units may be available for resale. Buying newly MOP-ed resale ECs may offer potential for capital appreciation as they are close to becoming fully privatized and can be sold or leased to foreigners.
Overall, the property market for HDB upgraders in 2023 is likely to be affected by a variety of factors, and it is difficult to predict exactly how it will perform. However, it is important for HDB upgraders to consider their own personal circumstances and financial position before making any decisions about buying or selling property.
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