It is crucial to take into account the upkeep and management of a condominium when making an investment. Condos usually have maintenance fees that encompass the maintenance of shared spaces and amenities. Although these fees may increase the total cost of owning a condo, they also guarantee that the property maintains its worth and stays in good condition. To make the investment less hands-on, hiring a property management firm can be beneficial in handling the daily management of the condominium. Additionally, keeping an eye on new condo launches can present new opportunities for investors.
Recently released flash estimates by Housing and Development Board (HDB) indicate that there was a 2.5% increase in resale flat prices in the fourth quarter of 2024, compared to the previous quarter’s 2.7%. This marks the 19th consecutive quarter of price increases in the HDB resale segment.
The data also shows that resale prices grew by 9.6% in 2024, which is double the growth recorded in 2023. However, the increase was slower compared to the previous two years, with a 10.4% price increase in 2022 and 12.7% in 2021. According to Christine Sun, chief researcher and strategist at OrangeTee Group, this could be due to government intervention in the market, with a reduction in the loan-to-value limit for HDB loans in August 2024.
Notably, data from data.gov.sg downloaded on Jan 2, showed a slowdown in price growth for some flat types. The median price of four-room flats saw a 2.5% increase in the fourth quarter of 2024, compared to a 3.4% growth in the third quarter. Similarly, two-room flats rose by 2% in the fourth quarter, slower than the 3.9% growth in the third quarter. On the other hand, prices of five-room flats increased by 3.2% in the fourth quarter, compared to a 1.2% increase in the third quarter.
The resale volume also saw a decline in the fourth quarter of 2024, with a 3.6% decrease year-on-year, to 6,314 units from 6,547 units in the same period in 2023. This could be attributed to the launch of over 8,500 new flats in the October Build-to-Order (BTO) exercise, according to Sun. Additionally, during the year-end school holidays, demand for resale flats usually decreases as many Singaporeans travel abroad.
Conversely, Wong Siew Ying, head of research and content at PropNex, believes that the slower growth in the fourth quarter of 2024 could be due to the August 2024 measures, which saw a reduction in the loan-to-value limit for HDB loans. Wong expects that the prices will continue to rise in 2025, but at a slower pace due to affordability concerns and the ongoing supply of BTO flats, which is expected to help moderate the price growth. However, this will depend on the number of BTO flats the government plans to release in the upcoming years.
In February 2025, HDB will launch its largest sale of balance flats (SBF) exercise, offering more than 5,500 flats across various towns. This, according to Eugene Lim, key executive officer of ERA Singapore, could have driven more homebuyers to seek out HDB resale homes in central locations. He also notes that some buyers may not want to deal with the restrictions imposed on resale flats such as a 10-year minimum occupation period (MOP), rental restrictions and a cap on resale income.
It is forecasted that HDB resale prices will grow at a more measured pace of 3% to 6% in 2025, with resale volume expected to reach between 26,000 to 27,000 units by the end of the year. PropNex, on the other hand, anticipates a growth of 5% to 7% for HDB resale flat prices in 2025, with an expected resale volume of between 29,000 to 30,000 units. Huttons expects the resale market to end the year with 26,000 to 28,000 transactions and a slower price growth of 5% to 8%.