Commentary: After first quarterly dip in nearly seven years, where are HDB resale prices headed?

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SINGAPORE: Prices of resale Housing and Development Board (HDB) flats fell for the first time in nearly seven years, raising an inevitable question: Is this a turning point in a market that heated up rapidly during COVID-19 and the years that followed?

Going by HDB’s flash estimates, the market is gradually finding its footing. The resale price index in the first quarter of 2026 showed a 0.1 per cent quarter-on-quarter dip following five straight quarters of slower or flat price growth.

This reflects the cumulative effect of earlier policy adjustments, including multiple rounds of cooling measures since 2021. For instance in August 2024, financing conditions were tightened when the maximum loan that home buyers can take from the HDB was lowered – a move aimed at tempering demand.

Policy moves were also taken to direct housing demand more effectively across different options, such as by setting aside a larger share of flats for first-timer families and expanding housing options for singles.

At the same time, supply was ramped up, which included more new flats in prime locations under the new classification framework and with shorter waiting times.

During the Build-to-Order (BTO) exercise last October, 3,294 flats with waiting times of less than three years were offered across four projects in Bedok, Sengkang and Yishun. This likely appealed to some home buyers who were considering resale flats, going by data from HDB and PropertyDoctors which showed HDB resale volumes that month down by about 38.5 per cent month-on-month and 37.4 per cent year-on-year.

Separately, new Prime and Plus flats have widened options for buyers by offering homes in attractive locations and additional subsidies to ensure affordability. While these also come with tighter resale conditions, such as a 10-year minimum occupation period, they still appeal to home buyers with a longer holding horizon.

These mean that some demand that might otherwise have flowed into the resale market is now being channelled towards BTO flats, with the moderation in HDB resale prices a sign that policies are working as intended to keep the housing system orderly.

A CHANGING MARKET

That said, the HDB resale market remains an important option for those who need housing sooner. Buyers may be increasingly less willing to stretch aggressively on price, but some units should continue outperforming the market.

For example, flats with desirable attributes, such as being located near MRT stations, schools and amenities, will likely still see firm demand in a more selective market.

Newer units with longer leases are also better placed to preserve value. Our comparison of transactions from the first four months of 2026 with the same period last year showed that the average prices of four- and five-room HDB flats with 50 to 59 years left on their leases fell by 0 to 2.3 per cent. In contrast, those with 60 to 69 years remaining on their leases appreciated between 3.2 to 3.5 per cent.

At the same time, uncertainty stemming from the conflict in the Middle East will sway market sentiment, with buyers likely to take a more cautious and longer-term view and even being prepared to compromise on location and size in order to stay within budget.

But uncertainty could also push more private home owners to right size, particularly as they approach retirement. This would add to the demand for larger HDB flats, particularly those in more desirable locations.

This was what we observed with the Russia-Ukraine war in 2022, which saw a very small but growing number of HDB resale flats fetching at least S$1 million (US$787,340) and strong price growth for larger flats in non-mature towns such as Sembawang and Woodlands.

That same year also saw the introduction of a 15-month wait-out period for former and current owners of private homes seeking to buy public housing flats. The restriction was aimed at cooling the HDB resale market for higher-priced flats, which was heating up partly due to demand from private property downgraders flush with capital.

This underscored how periods of uncertainty can have implications for housing demand, especially as HDB flats are often seen as a more affordable option.

WHAT IT MEANS FOR BUYERS AND SELLERS

Despite heightened uncertainty and expectations of higher inflation, the HDB resale market is set to continue moving towards a more balanced state.

In previous housing cycles, sharper and more persistent declines were usually accompanied by clearer signs of economic weakness, financial stress, or a more abrupt withdrawal of demand. That is not what current assessments are suggesting. The outlook is hence for prices to remain broadly stable, with mild fluctuations rather than a sustained downtrend.

For buyers, this reduces the feeling of having to chase the market, but don’t expect materially cheaper prices. A more prudent approach is to focus on affordability, financing resilience and the quality of the property itself.

For sellers, a plateauing market means expectations will need to be adjusted based on attributes of the property.

For private property owners hoping that the 15-month wait-out rule could be relaxed or lifted, there might be some disappointment.

While the government has said that the policy would be removed when market conditions allow and recent data point towards a normalisation in HDB resale prices, caution will still be warranted given risks linked to the Middle East conflict.

It is also unlikely that the government will move based on a single quarter of price decline. Instead, they will opt to assess a broader set of indicators – ranging from BTO application rates, demand for higher-priced resale flats and the time taken for buyers to secure a resale flat – to ensure sufficient supply across both the BTO pipeline and resale market. 
    
This caution should also extend to home owners as bigger risks, including global economic uncertainty, interest rate movements and geopolitical developments, loom large. In the current environment, prudence matters more than anything.

Lee Nai Jia is director of Singapore-based property media company PropertyDoctors.