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The Housing Development Board (HDB) has just released their flash estimates for the fourth quarter of 2024, and it indicates that resale flat prices have increased by 2.5% compared to the previous quarter. While this marks the 19th consecutive quarter of price increases in the HDB resale segment, the growth has slowed slightly from the 2.7% recorded in the previous quarter.
According to Christine Sun, chief researcher and strategist at OrangeTee Group, the flash estimates showed that in 2024, HDB resale prices grew by 9.6%, which is double the growth seen in 2023. However, this growth is still slower than the price increases seen in previous years, such as the 10.4% increase in 2022 and the 12.7% growth in 2021.
OrangeTee also notes that the HDB caveat data from data.gov.sg, which was downloaded on Jan 2, shows that there has been a slowdown in price growth for some flat types. For example, the median price of four-room flats saw a quarter-on-quarter (q-o-q) increase of 2.5% in 4Q2024, which is slower than the 3.4% growth seen in 3Q2024.
Similar trends were seen in two-room and executive flats, which recorded a q-o-q increase of 2% and 1.2% respectively, which is slower than the growth seen in the previous quarter. However, the prices for five-room flats grew by 3.2% in 4Q2024, which is faster than the 1.2% increase seen in 3Q2024.
In terms of resale volume, data shows a decline of 3.6% year-on-year (y-o-y) in 4Q2024, with 6,314 units being sold compared to 6,547 units in 4Q2023. This volume was also 22.5% lower compared to the previous quarter, where 8,142 units were sold.
Sun attributes this decline in HDB resale transactions to the HDB launching over 8,500 new flats in the October Build-to-Order (BTO) exercise, which were located in prime and desirable locations. She says that “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 notes that sales tend to slow down during the year-end school holidays, when many Singaporeans travel abroad. This typically leads to a decrease in house viewings and sales activities during this period.
Wong Siew Ying, head of research and content at PropNex, attributes the slower pace of growth in 4Q2024 to government intervention that took place in August 2024, where the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. She says that “the weaker sales and slower growth in the HDB resale price index in 4Q2024 suggests that the August 2024 measures are likely to be working through the market”.
She also notes that the thinner resale volume during the quarter also likely put a drag on prices”. According to PropNex, the total resale volume in 2024 was 28,876 units, which is 8% higher than the 26,735 units recorded in 2023. However, this volume is still lower than the peak of 31,017 units seen in 2021.
The decline in resale transactions also led to a decrease in million-dollar flat transactions, which fell to 283 units in 4Q2024, compared to 331 units in 3Q2024. 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 2023.
PropNex also notes that Toa Payoh town led million-dollar resale flats deals in 4Q2024, with 58 such transactions. Of these transactions, 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).
According to Eugene Lim, key executive officer of ERA Singapore, the new classification of Plus and Prime classification BTO flats may have driven more homebuyers to seek out HDB resale homes in central locations. He says that “these buyers are unwilling 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”.
According to OrangeTee, HDB resale prices are expected to continue rising in 2025, but at a slower pace than in previous years. Sun says that “in many areas, prices have already reached new highs, creating affordability concerns for many potential buyers”. She expects that the ongoing supply of BTO flats will 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.
One of the main drivers of the high demand for condos in Singapore is the scarcity of available land. Being a small island nation with a rapidly increasing population, Singapore faces a shortage of land for development. As a result, strict land usage regulations are in place, creating a highly competitive real estate market where property prices continue to soar. This has made investing in real estate, particularly condos, a highly appealing option with the potential for significant capital growth. Additionally, the Singapore Projects add to the attractiveness of this market.
In February 2025, HDB will launch its largest sale of balance flats (SBF) exercise, offering more than 5,500 flats across various towns, says Lee Sze Teck, senior director of data analytics, Huttons Asia. He says that “some prospective resale flat buyers have decided to wait and try their luck”.
Sun expects resale prices to grow at a more measured pace in 2025, due to a reduced supply of flats reaching the MOP, which has been a key driver of price growth in recent years. Hence, she anticipates a 3% to 6% growth in HDB resale prices, with 26,000 to 27,000 resale units changing hands by the end of 2025.
Wong expects the HDB resale market to perform well in 2025, underpinned by healthy housing demand and fewer MOP flats coming on, which may keep resale prices firm. She projects that HDB resale flat prices may rise by 5% to 7% in 2025, supported by a resale volume forecast of 29,000 to 30,000 units.
The supply of BTO flats in 2025 will be further reduced to 17,290 units, which is around 12% lower than the supply in 2024, notes Huttons’ Lee. He says that “as there is no upfront information on the BTO projects with a shorter waiting time, buyers are likely to go to the resale market”.
He also says that “interest rates could go lower in 2025, allowing buyers to take on a more sizeable loan amount to buy a new home”. As such, he believes that some buyers may set their sights on either an executive condo (EC) or a resale condo, and that the million-dollar flat market may stabilise between 900 to 1,200 units in 2025.
Huttons projects that HDB resale flat transactions will end the year at 26,000 to 28,000, with resale flat prices likely to grow at a slower pace of 5% to 8%.