According to the latest HDB flash estimates released on Jan 2, resale flat prices increased by 2.5% on a quarterly basis in the fourth quarter of 2024, a slight deceleration from the 2.7% growth seen in the previous quarter. This marks the 19th consecutive quarter of price growth in the HDB resale segment.
The flash estimates also showed that HDB resale prices rose by 9.6% in 2024, which is nearly double the 4.9% growth recorded in 2023. However, this growth was slower compared to the 10.4% increase in 2022 and the 12.7% rise in 2021, according to Christine Sun, chief researcher and strategist at OrangeTee Group.
The HDB caveat data from data.gov.sg, downloaded at 8.15am on Jan 2, indicated a slowdown in the price growth of some flat types, notes OrangeTee. For instance, the median price of four-room flats rose by 2.5% on a quarterly basis in 4Q2024, which is slower than the 3.4% growth seen in 3Q2024.
Similarly, the prices of two-room flats increased by 2% on a quarterly basis in 4Q2024, which is also slower than the 3.9% growth seen in 3Q2024. Executive flats registered a 1.2% growth in the same period, compared to the 1.7% growth seen in the previous quarter.
In contrast, the prices of five-room flats grew by 3.2% in 4Q2024, faster than the 1.2% increase seen in 3Q2024.
Resale volume down 3.6% y-o-y in 4Q2024
The resale volume for the HDB segment declined by 3.6% year-on-year to 6,314 units in 4Q2024 from 6,547 transactions in 4Q2023. It also fell by 22.5% on a quarterly basis, from 8,142 units in 3Q2024.
Sun believes that the drop in HDB resale transactions can be attributed to the government’s launch of more than 8,500 new flats in the October Build-to-Order (BTO) exercise, with many units being located in prime and desirable locations. “The attractive features of these flats, such as scenic views and proximity to MRT stations, have diverted demand away from the resale market towards the BTO market,” she adds.
The seasonal year-end school holidays, when many Singaporeans tend to travel abroad, also saw a decline in sales. This period typically experiences a decrease in house viewings and sales activities.
However, Wong Siew Ying, head of research and content at PropNex, attributes the slower pace of growth in 4Q2024 to the government’s intervention in August 2024, when the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. “Given the weaker sales and slower growth in the HDB resale price index in 4Q2024, the August 2024 measures are likely to be working through the market,” says Wong. “Furthermore, the lower resale volume during the quarter could have also had a drag on prices.”
The total resale volume in 2024 increased by 8% to 28,876 units, from the 26,735 units seen in the previous year, and 27,896 units in 2022. However, it is still lower than the peak of 31,017 units seen in 2021.
Decline in million-dollar flat transactions in 4Q2024
The lower resale transactions in 4Q2024 also led to a decrease in million-dollar flat transactions, with only 283 units sold, compared to 331 units in 3Q2024. Despite the drop, the total number of million-dollar transactions reached a record high of 1,033 units in 2024, notes OrangeTee’s Sun. “The figure is more than double the 469 million-dollar transactions recorded in the previous year,” she points out.
Toa Payoh town made up the highest number of million-dollar resale flat deals in 4Q2024, with 58 transactions. Out of these, 20 were for four- and five-room units at Alkaff Vista in Bidadari Park Drive, which had recently crossed the five-year minimum occupation period (MOP).* Based on caveats and may differ from actual numbers. Source: HDB, Huttons Data Analytics as of 31 Dec 2024
Eugene Lim, key executive officer of ERA Singapore, believes that the new classification of “Plus” and “Prime” category BTO flats may have driven more homebuyers to seek out HDB resale homes in central locations. “These buyers are averse to 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 expects HDB resale prices to continue rising in 2025, but at a slower pace than in previous years. Sun explains that in many areas, prices have already reached new highs, creating affordability concerns for many potential buyers. She adds that the ongoing supply of BTO flats is expected to help moderate price growth in the secondary market. However, the degree of price stabilisation will depend on the number of BTO flats the government plans to release in the upcoming years.
The largest sale of balance flats (SBF) exercise will be launched by the HDB in February 2025, offering more than 5,500 flats across various towns, notes Lee Sze Teck, senior director of data analytics at Huttons Asia. “Some prospective resale flat buyers may wait to try their luck,” he adds.
Price growth, transaction volume to moderate
According to Lim, ERA expects resale prices to grow at a more measured pace in 2025 due to a reduced supply of flats reaching MOP, which has been a key driver of price growth in recent years. He anticipates a 3% to 6% growth in HDB resale prices, with 26,000 to 27,000 resale units being sold by the end of 2025.
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PropNex is expecting the HDB resale market to continue performing well in 2025, driven by healthy housing demand and fewer MOP flats entering the market, which could keep resale prices firm, says Wong. “Resale flats will continue to attract strong interest from those with more pressing housing needs, applicants who are unable to secure a BTO flat, and families with tighter housing budgets.”
Wong is projecting a 5% to 7% increase in HDB resale flat prices in 2025, with an estimated resale volume of 29,000 to 30,000 units.
As the supply of BTO flats for 2025 decreased to 17,290 units, which is approximately 12% lower than the supply in 2024, Huttons’ Lee believes that buyers will be drawn to the resale market as there is no upfront information on BTO projects with shorter waiting times.
He notes that lower interest rates in 2025 could enable buyers to take on larger loans in order to purchase a new home. “Some buyers may shift their focus to either an executive condo (EC) or a resale condo,” adds Lee. “The million-dollar flat market is expected to stabilise at around 900 to 1,200 units in 2025.”
Huttons forecasts the resale volume for HDB flats to reach 26,000 to 28,000 units at the end of 2025, with prices likely to experience a slower growth trajectory of 5% to 8%.