Resale Flat Prices Rise 25 19Th Straight Quarter Hdb 4Q2024 Flash
Is it a Good Deal?: $590,000 for a four-room HDB flat in Jurong West with remaining lease of 95 yearsIs it a Good Deal?: $2,800 for a five-room HDB flat at Clementi Ave 6 with remaining lease of 94 yearsIs it a Good Deal?: $2,100 for four-room HDB flat at Tampines with remaining lease of 90 yearsIs it a Good Deal?: $460,000 for a three-room HDB flat at Bukit Panjang with remaining lease of 89 years
The recently released flash estimates by HDB on Jan 2 showed a 2.5% q-o-q increase in resale flat prices in 4Q2024, slightly lower than the 2.7% growth recorded in the previous quarter. This marks the 19th consecutive quarter of price increases in the HDB resale segment.
According to Christine Sun, chief researcher and strategist at OrangeTee Group, 2024 saw a significant growth of 9.6% in HDB resale prices, doubling the 4.9% in 2023. However, it was still slower than the 10.4% increase in 2022 and 12.7% in 2021.
The latest HDB caveat data from data.gov.sg, downloaded at 8.15am on Jan 2, shows a slowdown in price growth for some flat types, notes OrangeTee. The median price of four-room flats saw a q-o-q increase of 2.5% in 4Q2024, slower than the 3.4% growth in 3Q2024. Similarly, two-room flats rose by 2% q-o-q in 4Q2024, a decrease from the 3.9% growth in 3Q2024. Executive flats registered a 1.2% q-o-q price increase in 4Q2024, compared to the previous quarter’s 1.7% growth. On the other hand, prices for five-room flats grew by 3.2% in 4Q2024, faster than the 1.2% increase in 3Q2024.
Resale volume down 3.6% y-o-y in 4Q2024
Resale volume declined by 3.6% year-on-year to 6,314 units in 4Q2024 from 6,547 transactions in 4Q2023. It was also down 22.5% q-o-q from 8,142 units in 3Q2024. Sun attributes this decline in HDB resale transactions to the launch of more than 8,500 new flats in the October Build-to-Order (BTO) exercise, with many units in prime and desirable locations. The attractive features of these flats, such as scenic views and proximity to MRT stations, diverted demand away from the resale market towards BTO market.
Furthermore, sales typically slow down during the seasonal year-end school holidays, when many Singaporeans travel abroad. This leads to a decrease in house viewings and sales activities during this period.
However, Wong Siew Ying, head of research and content at PropNex, believes that the slower pace of growth in 4Q2024 could be due to government intervention in August 2024, when the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. As a result, the August 2024 measures are likely to be affecting the market, leading to a weaker sales and slower growth in the HDB resale price index. The thinner resale volume during the quarter could have also put a drag on prices.
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The total resale volume in 2024 was 28,876 units, an increase of 8% from the 26,735 units recorded in 2023, but still lower than the peak of 31,017 units in 2021.
Decline in million-dollar flat transactions in 4Q2024
The decline in resale transactions in 4Q2024 led to a decrease in million-dollar flat transactions to 283 units from 331 units in 3Q2024. However, the total number of million-dollar transactions reached a record high of 1,033 units in 2024, double the 469 million-dollar transactions recorded in the previous year.
Toa Payoh town had the highest number of million-dollar resale flat deals in 4Q2024, with 58 transactions. 20 of these were for four- and five-room units at Alkaff Vista in Bidadari Park Drive, which had recently reached the five-year minimum occupation period (MOP).
“The new classification of Plus and Prime classification BTO flats may have driven more homebuyers to seek out HDB resale homes in central locations,” says Eugene Lim, key executive officer of ERA Singapore. “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.”
HDB resale prices are expected to continue rising in 2025, but at a slower rate than in previous years, says OrangeTee. Prices have already reached new highs in many areas, raising concerns for potential buyers. Furthermore, the ongoing supply of BTO flats is expected to help moderate price growth in the secondary market. The degree of price stabilisation 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. According to Lee Sze Teck, senior director of data analytics at Huttons Asia, some prospective resale flat buyers have decided to wait to try their luck.
Price growth and transaction volume expected to moderate
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. They anticipate a 3% to 6% growth in HDB resale prices, with 26,000 to 27,000 resale units changing hands by the end of 2025.
PropNex expects the HDB resale market to continue performing well in 2025, supported by healthy housing demand and fewer MOP flats coming on. Wong is projecting a 5% to 7% rise in HDB resale flat prices, with a resale volume forecast of 29,000 to 30,000 units.
Due to a reduced supply of BTO flats in 2025 (17,290 units, about 12% lower than the supply in 2024), Huttons projects that more buyers will turn to the resale market. Interest rates are also expected to go lower in 2025, allowing buyers to take on a more sizeable loan amount to buy a new home. This could result in some buyers setting their sights on either an executive condo (EC) or a resale condo. The market for million-dollar flats may stabilise at 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 rising at a slower pace of 5% to 8%.