31,000+ MOP HDB Flats Coming in 2022, How Will This Supply Affect Price?

The HDB resale market is booming. According to PropertyGuru’s Singapore Property Market Report Q1 2022, HDB resale flat prices have been rising for 14 straight quarters. The HDB Resale Price Index, compiled by the HDB, indicates a quarter-on-quarter increase of 3.4% from Q3 2021 to Q4 2021, the biggest increase since Q3 2011. HDB resale price flash estimates for Q1 2022 suggest that prices saw a 2.3% quarter-on-quarter growth.

This might seem incongruent in the middle of a pandemic, but there have actually been many factors fuelling the price increase, including a fresh round of BTO flat construction delays which have pushed buyers to the resale market, an abundance of HDB upgraders in 2021 buying bigger flats, and increasing intolerance of long BTO construction times, possibly as a response to the need for personal space due to the pandemic.

For prospective buyers who have been wringing their hands at rising resale prices, the good news is that price growth is expected to slow in the upcoming year. In 2022, more than 31,000 flats will fulfil their Minimum Occupation Period (MOP), the highest number since record-keeping started in 2007. This spike in supply is expected to mitigate HDB resale price increases.

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. HDB Flats Fetching Highest Highest 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). 

Related article: Executive Condo Singapore (2022): 4 Upcoming ECs We Can Expect

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.

Related article: Battle of the Big Flats: Maisonette, Jumbo Flat, Executive Flat, 3Gen Flat, 5-Room Flat

Should You Sell Your Freshly HDB MOP-ed Flat in 2022?

If you’re the owner of a new or soon-to-be MOP-ed flat, then you may be wondering whether 2022 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.

Assuming demand remains the same, the large supply of new resale flats entering the market would likely push prices down. In that case, should you hold on to your property for slightly longer?

The demand for residential property has been unexpectedly strong throughout most of the pandemic and is expected to remain robust in 2022. The pandemic seems to have boosted demand for HDB resale property due to factors such as:

• Delays in BTO completion times
• A growing tendency to telecommute, with hybrid or work from home arrangments still being the norm
• Increased demand for space caused by longer hours spent at home.

In 2022, resale prices are expected to continue to rise, albeit at a slower pace. The slowdown in the increase of prices is expected to be due in part to a boost in supply caused by the high number of flats attaining their MOP this year.

2022 HDB MOP Flats

Here are the flats that have fulfilled or are scheduled to fulfil their MOP in 2022.

* For seniors aged 55 and above

Related article: 60 Freshly MOP-ed HDB Resale Flats in Singapore to Expect in 2022/2023

How Will HDB MOP-ed Resale Flats Affect the Market in 2022?

The trend of a large number of flats attaining their MOP continues into 2022. Let’s take a closer look at how the influx of HDB MOP flats affected the market in 2021 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 five-year-old (MOP) HDB flats that entered the resale market in 2021 actually helped to stimulate demand.
• HDB resale prices rose by 12.7% in 2021, registering record growth since 2010.
• 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%.

The strong home resale prices could be attributed in part to the high volume of MOP HDB flats being put up for sale, as well as strong demand due to factors such as BTO construction delays.

HDB flat sellers typically buy a new home at the same time as they sell their flats on the resale market, thereby stimulating demand at the same time as they increase supply. This in turn has led to increased purchases of condos and supported resale HDB and condo prices despite the ongoing pandemic.

Related article: Renting in Singapore (2022): 3 Upcoming Trends for the HDB and Private Rental Market

Will This “HDB MOP Effect” Continue Into 2022?

With about 30,000 flats scheduled to receive their MOP in 2022, the resale market is going to experience a spike in supply this year. This is likely to somewhat mitigate the rise in resale prices.

However, some of the factors contributing to strong demand, including BTO construction delays and increased telecommuting, are likely to continue into 2022.

BTO construction is still experiencing hiccups, with some ongoing construction projects experiencing delays of between 6 to 12 months due to persisting supply chain issues.

Furthermore, although many of the coronavirus restrictions have been lifted and many workers are going back to the office, the rate of telecommuting is unlikely to fall to pre-pandemic levels. Businesses have had time over the past two years to put in place telecommuting infrastructure, with some deciding to adopt hybrid working practices even after the pandemic.

In addition, the record 259 million-dollar HDB transactions which took place in 2021. Comparatively, 82 million-dollar HDB flats transacted in Q1 2022, which makes the pace of million-dollar flats sold this year on track to match that of the previous year.

Related article: Million-Dollar HDB Resale Flats in 2021: What’s So Special About Them?

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 2021.

More FAQs about MOP HDB Resale Flats

Where to Find HDB Resale Flat Listings?

PropertyGuru.com has one of Singapore’s biggest databases of property listings, including HDB resale flat listings.

What Is MOP for HDB?

MOP, or minimum occupation period, is the time period where you need to physically stay in your HDB flat. When your HDB MOP is up, you can then sell or rent your HDB flat. If you want to own multiple properties with an HDB flat being one of them, you will also need to fulfil the MOP.

Can I BTO Before HDB MOP?

If you want to apply for another BTO, you will need to fulfil the 5-year HDB MOP on your existing resale flat or BTO HDB flat. You can only start your new BTO application AFTER the 5-year HDB MOP mark is crossed.

Can I Rent Out HDB During MOP?

To rent out the whole HDB flat, you need to first meet your 5-year MOP. However, if you choose to rent out the rest of the space and physically live in a single room, that is possible as well.

How Long Is the MOP?

The MOP for HDB flats is usually five years, but flats under the Prime Location Public Housing (PLH) model have a 10-year MOP.

For more property news, resources and useful content like this article, check out PropertyGuru’s guides section. 

Are you looking to buy a new home? Head to PropertyGuru to browse the top properties for sale in Singapore.  

Already found a new home? Let PropertyGuru Finance’s home finance advisors help you with financing it.