The HDB resale market is booming. Prices are currently at a record high and are set to continue increasing, albeit at a slower pace. Year on year, HDB resale flat prices are estimated to have increased by 10.3% in 2022, slower than the 12.7% increase in 2021.
Various factors have been fuelling the price increase, including continued BTO construction delays (though the situation has improved and more projects have been completed) and young families unwilling to wait out long BTO completion times. The enduring preference for a larger living space also meant buyers were willing to pay price premiums for bigger flat types.
In 2022, 31,325 flats fulfilled their Minimum Occupation Period (MOP), the highest number since record-keeping started in 2007. However, this number will drop to 15,748 units in 2023, half that of the previous year. These newly MOP-ed flats provide a welcome boost to the current low supply of available HDB resale flats. But how will they affect HDB resale prices? Let’s find out.
First of All, What’s the Big Deal About HDB MOP-ed Resale Flats?
Many sellers rush to sell their 5-year-old HDB flats as soon as the HDB Minimum Occupation Period (MOP) is fulfilled. But why?
In summary, here are some of the top reasons why homeowners choose to sell their home as an HDB MOP resale flat:
HDB flats fetch the highest resale value after their 5-year HDB MOP
HDB upgraders want to lock in gains earned on their MOP-ed flats to finance their condo upgrade or move to a larger or more centrally-located HDB flat
Bigger households need a larger space to accommodate their growing families
1. Freshly MOP-ed HDB Flats Fetch the Highest Resale Value
There is the perception that selling an HDB flat as soon as the HDB MOP expires will garner the highest resale prices as the flat is still new, in good condition and has the longest possible remaining lease for a resale flat.
Hence, 5-year-old flats also tend to enjoy healthy demand on the resale market, as buyers are attracted to newer flats with a high number of years left on their 99-year leases. Not only does this ensure that they do not outlive the lease, but it also makes the flat more valuable as a potential property inheritance for their children.
Furthermore, buyers who wish to save on HDB renovations may want freshly MOP-ed flats as they’re likely still to be in good shape.
2. HDB Upgraders Want to Finance Their New Property Purchase
Finally, there are households who aspire to live in private property and may wish to upgrade when they find an affordable condo unit or cheap freehold condo that is within their budget. They tend to go for entry-level new launch condos or Executive Condominiums (ECs).
There will also be households who wish to live in a more central location or much larger living space, but could not afford to do so before.
3. Young Families With Children Need More Space
In addition, there will be buyers who wish to upgrade their homes but have had to wait for the HDB MOP to be over in order to sell their flats. This includes those whose families have expanded and who thus need a bigger flat. Some families with young children might also be thinking about moving to a bigger space if they want more kids.
2023 HDB MOP Flats
Here are the flats that have fulfilled or are scheduled to fulfil their MOP in 2023. This list is meant to be non-exhaustive, should there be a project we have missed, do let us know.
BTO project expected to MOP in 2023
Nearest MRT station
Number of units
Cheng San Court
Ang Mo Kio (800m)
Tanah Merah (1.2km)
West Ridges @ Bukit Batok
Bukit Batok (1.9km)
West Valley @ Bukit Batok
Bukit Batok (1.7km)
Toa Payoh Apex
Toa Payoh (1.1km)
Yung Ho Spring I, Yung Ho Spring II
Chinese Garden (2.6km)
West Terra @ Bukit Batok
Bukit Batok (700m)
Meadow Spring @ Yishun
Blossom Spring @ Yishun
West Rock @ Bukit Batok
Bukit Gombak (2.2km)
How Will HDB MOP-ed Resale Flats Affect the Market in 2023?
The trend of a large number of flats attaining their MOP continues into 2023. Let’s take a closer look at how the influx of HDB MOP flats affected the market in 2021 and in 2022 in order to predict how the market may react in the coming year.
Key Impact of HDB MOP Resale Flats in 2021
The high number of freshly MOP-ed HDB flats that entered the resale market in 2021 (25,000+ flats) actually helped to stimulate demand.
HDB resale prices rose by 12.7% in 2021, registering record growth since 2010; in part, this strong home resale prices can be attributed to the high volume of MOP HDB flats put on sale
The number of HDB resale transactions in 2021 was 3% higher than in 2020
In 2021, there were 259 million-dollar HDB transactions, an all-time high and a sharp increase from 2020.
The high number of HDB transactions led to knock-on effects for the private property market as more sellers upgraded to private property. Private home prices rose by 106% in 2021, while rents rose by 9.9%. Some also bought larger resale HDB flat types in response to the absence of new major condo launches.
Key Impact of HDB MOP Resale Flats in 2022
Similar to 2021, there was a huge number of flats that fulfilled their MOP in 2022 (31,000+ flats).
From 1 Jan 2022 to 29 Dec 2022, there were 27,773 HDB resale flat transactions, 9.7% less than in the same period last year (30,769 cases).
Year-on-year, HDB resale prices are estimated to rise 10.3%, slowing from the previous year.
368 million-dollar flat transactions occured in 2022, far outpacing that of 2021.
While there were more HDB resale flats that fulfilled their MOP in 2023, there were fewer HDB resale flat transactions. Supply remains tight as BTO construction delays endure. The lack of new major condo launches, as compared to pre-pandemic times, also pushed more towards buying HDB resale flats which were either larger and/or in desirable city fringe neighbourhoods.
Dr. Lee Nai Jia, Head of Real Estate Intelligence – Data and Software Solutions, PropertyGuru, points out that while prices continue to climb, they are doing so at a slowing pace.
“Historically, estates that have more newly MOP-ed HDB flats tend to see more transaction activity. Buyers seeking more space usually prefer to stay within the same neighbourhood to reduce disruptions to their lifestyles. Sellers, on the other hand, are seeking to upgrade their property. However, the recent interest rates hikes and increase in private home prices result in a longer time needed to conclude property deals.”
Should You Sell Your Freshly HDB MOP-ed Flat in 2023?
If you’re the owner of a new or soon-to-be MOP-ed flat, then you may be wondering whether 2023 will be a good year to sell your property and turn a profit. After all, HDB resale prices are at a record high and many others will be ‘MOP-ing’ with you and might be having similar thoughts.
In that case, should you hold on to your property for slightly longer or sell?
Assuming demand and buying preferences remain the same, the supply of 15,000+ new resale flats entering the market would likely bring some relief to the red-hot market.
The influx of new resale flats on the open market could temper price growth and we are likely to feel the full effects of the September 2022 property cooling measures kick in this year. Consequently, we should see prices holding steady or making modest gains.
Still, prices are likely to remain propped up due to the price premiums larger flat types are able to command. The preference for larger homes seems here to stay as hybrid working practices and work-from-home arrangements become the norm.
Also, while HDB has launched a whopping 23,194 BTO flats in 2022 alone in response to fervent demand, it is likely the effect of the increased supply will be lagged; it will likely take some for these homes to be built. Long BTO completion times will still push young families who are unwilling into the resale market.
Combined, these factors reveal a likelihood that demand for HDB resale flats will remain high. As a result, resale prices are expected to continue to rise, albeit at a slower pace than in previous years.
One last thing to note: with continually rising interest rates and increasing borrowing costs, alongside an uncertain macroeconomic outlook, we may see price resistance set in. Buyers may exercise more caution and financial prudence when purchasing a property – be it upgrading to a condo or a larger HDB flat type.
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