According to recent HDB flash estimates released on January 2, the resale flat prices have increased by 2.5% quarter-on-quarter (q-o-q) in the fourth quarter of 2024. This marks the 19th consecutive quarter of price increases in the HDB resale segment and indicates a slight slowdown from the 2.7% q-o-q growth in the previous quarter. The flash estimates also revealed that the HDB resale prices grew by 9.6% in 2024, which is significantly higher than the 4.9% growth recorded in 2023. However, it is lower than the 10.4% price increase in 2022 and the 12.7% growth in 2021. According to Christine Sun, chief researcher and strategist at OrangeTee Group, this is a sign that the HDB resale market is stabilizing.
OrangeTee’s Sun further noted that the HDB caveat data from data.gov.sg downloaded at 8.15am on January 2 showed a slowdown in price growth for some flat types. For example, the median price of four-room flats saw a q-o-q increase of 2.5% in the fourth quarter of 2024, which is lower than the 3.4% growth recorded in the third quarter of 2024. Similarly, two-room flats rose by 2% q-o-q in the fourth quarter of 2024, which is slower than the 3.9% growth in the previous quarter. Executive flats registered a 1.2% q-o-q price increase in the fourth quarter of 2024, compared to 1.7% in the previous quarter. In contrast, prices for five-room flats grew 3.2% in the fourth quarter of 2024, which is higher than the 1.2% increase in the third quarter of 2024.
The resale volume also declined by 3.6% year-on-year (y-o-y) in the fourth quarter of 2024. This is a decrease from 6,547 transactions in the fourth quarter of 2023 to 6,314 units in the fourth quarter of 2024. It is also lower by 22.5% q-o-q from 8,142 units in the third quarter of 2024. According to Sun, the primary reason for this decline in HDB resale transactions is due to the launch of over 8,500 new flats by HDB in the BTO (Build-to-Order) exercise in October 2024. The attractive features of these flats, including scenic views and proximity to MRT stations, diverted demand away from the resale market towards the BTO market. She also added that the seasonal year-end school holidays could have contributed to the decrease in sales activities and house viewings.
However, Wong Siew Ying, head of research and content at PropNex, attributed the slower pace of growth in the fourth quarter of 2024 to the government’s intervention in August 2024, when they reduced the loan-to-value (LTV) limit for HDB loans by five percentage points to 75%. According to Wong, this shows that the August 2024 measures have started to impact the market. She also noted that the lower resale volume during the quarter may have affected the prices.
The total resale volume for the year 2024 was 28,876 units, which is 8% higher than the previous year’s figure of 26,735 units and the 27,896 units recorded in 2022. However, it is still lower than the peak of 31,017 units recorded in 2021. This data is based on caveats and may differ from the actual numbers. Wong stated that this increase in resale volume was driven by the attractive prices in the resale market.
According to OrangeTee’s Sun, the decline in resale transactions in the fourth quarter of 2024 led to a decrease in million-dollar flat transactions to 283 units from 331 units in the third quarter of 2024. However, the total number of million-dollar transactions reached a record high of 1,033 units in 2024, which is more than double the 469 million-dollar transactions recorded in the previous year. In the fourth quarter of 2024, Toa Payoh town led million-dollar resale flat deals with 58 transactions, 20 of which were for four- and five-room units at Alkaff Vista in Bidadari Park Drive, which had recently reached the minimum occupation period (MOP).
Eugene Lim, key executive officer of ERA Singapore, noted that the introduction of Plus and Prime classification BTO flats may have led to more buyers opting for HDB resale homes in central locations. These buyers may not be willing to accept the resale restrictions, such as a 10-year MOP, rental restrictions after MOP, subsidy clawback upon resale, and resale income cap on future buyers.
OrangeTee predicts that the HDB resale prices will continue to rise in 2025, albeit at a slower rate than in previous years. Many areas have already reached new highs, which could lead to affordability concerns for potential buyers. The ongoing supply of BTO flats is expected to curb the price growth in the secondary market. However, the degree of price stabilization will depend on the number of BTO flats released by the government in the upcoming years.
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In February 2025, HDB will launch its largest sale of balance flats (SBF) exercise, offering more than 5,500 flats in different towns. Lee Sze Teck, senior director of data analytics at Huttons Asia, stated that some prospective resale flat buyers may wait to try their luck in this exercise. He also expects the HDB resale prices to grow at a slower pace in 2025 compared to previous years due to a reduced supply of flats reaching MOP, which has been a key driver of price growth.
PropNex predicts that the HDB resale market will perform well in 2025, driven by healthy housing demand and fewer MOP flats coming on – possibly keeping resale prices firm. It is also expected to attract strong buying interest from those with more pressing housing needs, applicants who cannot secure a BTO flat, and families with a tighter housing budget. Therefore, they anticipate a growth of 5% to 7% in HDB resale flat prices and a resale volume of 29,000 to 30,000 units in 2025.
According to Huttons, the supply of BTO flats in 2025 is further reduced to 17,290 units, about 12% lower than the supply in 2024. This could lead to an increase in demand in the resale market. Huttons projects that the HDB resale flat transactions will end the year at 26,000 to 28,000, with resale flat prices growing at a slower pace of 5% to 8%.