Is it a Good Deal?: $538,000 for a four-room HDB in Bukit Batok with Balance Lease of 91 yearsIs it a Good Deal?: $780,000 for a five-room HDB in Bukit Panjang with remaining lease of 86 yearsIs it a Good Deal?: $608,000 for a five-room HDB in Punggol with remaining lease of 93 yearsIs it a Good Deal?: $480,000 for a three-room HDB in Tampines with remaining lease of 73 yearsIs it a Good Deal?: $595,000 for a five-room HDB in Queenstown with remaining lease of 78 years Is it a Good Deal?: $620,000 for a four-room HDB in Hougang with remaining lease of 81 years
The recently released HDB flash estimates for the fourth quarter of 2024 showed a 2.5% increase in resale flat prices, a slight slowdown from the 2.7% growth seen in the previous quarter. This marks the 19th consecutive quarter of price increases in the HDB resale market.
According to the flash estimates, the HDB resale prices grew by 9.6% in 2024, which is double the 4.9% growth seen in 2023. However, the growth is slower compared to the 10.4% increase in 2022 and the 12.7% growth in 2021, according to Christine Sun, Chief Researcher and Strategist at OrangeTee Group.
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Caveat data from data.gov.sg downloaded on Jan 2 at 8.15am showed a deceleration of price growth in certain flat types, notes OrangeTee. For instance, the median price of four-room flats saw a 2.5% increase quarter-on-quarter (q-o-q) in 4Q2024, a slower pace compared to the 3.4% growth seen in 3Q2024.
Similarly, two-room flats rose by 2% q-o-q in 4Q2024, slower than the 3.9% growth in 3Q2024. Executive flats saw a q-o-q price increase of 1.2% in 4Q2024, compared to 1.7% in the previous quarter.
In contrast, prices for five-room flats grew by 3.2% in 4Q2024, faster than the 1.2% increase seen in 3Q2024.
Resale volume down 3.6% year-on-year (y-o-y) in 4Q2024
The resale volume declined by 3.6% y-o-y to 6,314 units in 4Q2024 from 6,547 transactions in 4Q2023. It was down 22.5% q-o-q from 8,142 units in 3Q2024.
Sun attributes the decline in HDB resale transactions primarily to HDB launching over 8,500 new flats in the October Build-to-Order (BTO) exercise, with many units located in prime and desirable locations. “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 adds.
Sales also slowed during the seasonal year-end school holidays, when many Singaporeans tend to travel abroad. Consequently, house viewings and sales activities typically decrease during this period.
However, Wong Siew Ying, Head of Research and Content at PropNex, attributes the slower pace of growth in 4Q2024 to government intervention in August 2024, when the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. “Based on the weaker sales and slower growth in the HDB resale price index in 4Q2024, the measures implemented in August 2024 are likely to be taking effect in the market,” says Wong. She adds that the lower resale volume during the quarter has also contributed to the slower price growth.
The total resale volume in 2024 was 28,876 units, which is 8% higher than the 26,735 units recorded in the previous year and 27,896 units in 2022. However, it is 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 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. “This figure is more than double the 469 million-dollar transactions recorded in the previous year,” she points out.
Toa Payoh town led the million-dollar resale flat deals in 4Q2024, with 58 such transactions – 20 of which 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).
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“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. “In many areas, prices have already reached new highs, creating affordability concerns for many potential buyers,” adds Sun.
Furthermore, 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.
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 at Huttons Asia. “Some prospective resale flat buyers have decided to wait to try their luck,” he adds.
Price growth, transaction volume 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, notes Lim. Hence, he 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.
PropNex expects the HDB resale market to perform well in 2025, underpinned by healthy housing demand and fewer MOP flats coming on – possibly keeping resale prices firm, says Wong. “Resale flats will continue to enjoy strong buying interest from those with more pressing housing needs, applicants who cannot secure a BTO flat, and families with a tighter housing budget.” 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, about 12% lower than the supply in 2024, notes Huttons’ Lee. “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 reckons.
With interest rates potentially going lower in 2025, buyers may consider buying an executive condo (EC) or a resale condo, or resale HDB flats with a longer lease. The million-dollar flat market may stabilise in the range of 900 to 1,200 units in 2025, he adds.
Huttons projects that HDB resale flat transactions will end the year at 26,000 to 28,000, with prices likely to grow at a slower pace of 5% to 8%.