Weaker jobs outlook dims HDB resale market as prices, volume slip further in Q2

Price declines spread across more HDB towns, although million-dollar resale flat deals continue to climb [SINGAPORE] Growing caution among homebuyers facing a softer labour market and macroeconomic uncertainty dampened the resale market for Singapore public housing, with prices falling for a second straight quarter. Resale flat prices fell 0.3 per cent in Q2 after dipping 0.1 per cent in the prior quarter. Transaction volumes shrank 10.2 per cent to 6,268 units, from 6,981 in the year-ago period, based on flash estimates released by the Housing & Development Board (HDB) on Wednesday (Jul 1). Christine Sun, chief researcher and strategist of Realion (OrangeTee & ETC) Group, said: “Even as the overall labour market conditions stayed largely resilient, total employment growth slowed and retrenchments rose in the first quarter of this year. “The dimmer job market and hiring outlook may have prompted buyers to exercise greater caution, resulting in fewer transactions and price falls.” Lee Sze Teck, Huttons Asia’s senior director of data analytics, said resale activity was sluggish in the quarter, with few enquiries made. Flats are taking longer to sell, “averaging two to three months before a sale is concluded”, he added. In Q2, prices fell in more than half of HDB towns. Sun said prices fell quarter on quarter in 16 towns, with the steepest drops recorded in Serangoon (-7.9 per cent), Marine Parade (-7.6 per cent), Geylang (-6.9 per cent), Ang Mo Kio (-5.1 per cent), Sembawang (-3.3 per cent) and Yishun (-2.7 per cent). In contrast, 10 towns posted price increases, although most recorded gains of less than 5 per cent. The Central Area was the standout, with prices rising 19.7 per cent, followed by Clementi (4.5 per cent), Jurong East (4 per cent), Queenstown (4 per cent) and Woodlands (3 per cent). The overall decline in resale prices was driven by weaker prices for three-room and five-room flats, said Nicholas Mak, chief research officer of Mogul.sg. Median resale prices for three-room flats fell 0.5 per cent on quarter to S$442,888, while those for five-room flats declined 0.9 per cent to S$738,000. SEE ALSO More While median prices of two-room, four-room and executive flats rose 1.6 per cent, 0.3 per cent and 2.2 per cent, respectively, the gains were insufficient to offset the declines in the two segments, said Mak. A two-speed market Yet, the resale market is increasingly bifurcating, analysts said, pointing to rising numbers of million-dollar flat sales. A total of 491 HDB resale flats changed hands for at least S$1 million in Q2, bringing the first-half tally to 902 deals, surpassing the 763 recorded in the same period last year, said Eugene Lim, key executive officer at ERA Singapore. The Q2 tally was also 19.5 per cent higher than the previous quarter, said Huttons Asia’s Lee. Million-dollar flats accounted for about 7.8 per cent of all resale flat transactions in the quarter, marking the first time they made up more than 7 per cent of total resale deals, he added. June alone had 176 HDB resale flats change hands for at least S$1 million, in a record monthly high for such transactions, said Mogul’s Mak. Still, the average price of such flats slipped 0.3 per cent to S$1.147 million in Q2 from S$1.151 million in the preceding quarter, as more transactions took place in non-mature estates, said Lee. He added: “The proportion of million-dollar flat transactions in non-mature estates reached 10.6 per cent in Q2, the highest since Q1 2023’s 10.7 per cent. It could be early signs of buyers being priced out.” More supply, cautious buyers Analysts expect the resale market to remain subdued in the second half, as buyers contend with ample supply and fresh batches of Build-To-Order (BTO) units. “Flight to affordability may continue to impact the HDB resale market, as more buyers pivot away from pricey new flats in mature estates towards more affordable BTO units or older resale flats,” said Realion’s Sun. “Fewer buyers will be willing to pay high cash-over-valuation, which will further slow down the pace of price growth.” Mak reckons that the softness in HDB resale prices will be temporary. “Since the Singapore economy is currently not suffering a recession and the private residential property price index is still increasing, the HDB resale price index is expected to reach the bottom of the price cycle in the coming quarter and start to recover in the last three months of 2026,” he said.