HDB Flash Estimates Show Slight Slowing in Resale Flat Prices
The release of HDB flash estimates on January 2nd revealed that the prices of resale flats had risen by 2.5% quarter-on-quarter (q-o-q) in the fourth quarter of 2024. This growth is slightly slower than the 2.7% q-o-q increase recorded in the previous quarter. The latest figures mark the 19th consecutive quarter of price increases in the HDB resale segment.
According to Christine Sun, the chief researcher and strategist at OrangeTee Group, the flash estimates indicate that HDB resale prices grew by 9.6% in 2024. This is a significant jump from the 4.9% growth recorded in 2023, but still slower than the 10.4% increase in 2022 and the 12.7% growth in 2021.
Slower Price Growth for Some Flat Types, Notes OrangeTee
OrangeTee has noted a slowdown in the price growth for some flat types, according to HDB caveat data from data.gov.sg, which was downloaded at 8:15am on January 2nd. For instance, the median price of four-room flats saw a q-o-q increase of 2.5% in the fourth quarter of 2024, which is lower than the 3.4% growth recorded in the third quarter of the same year.
A similar trend was observed for two-room flats, which saw a 2% q-o-q increase in the fourth quarter of 2024, compared to a 3.9% growth in the previous quarter. Executive flats also registered a slower pace of growth, with a 1.2% q-o-q increase in the fourth quarter of 2024, compared to 1.7% in the third quarter.
On the other hand, the prices of five-room flats grew by 3.2% in the fourth quarter of 2024, which is faster than the 1.2% increase recorded in the third quarter.
Resale Volume Declines in the Fourth Quarter of 2024
The fourth quarter of 2024 saw a decline in resale volume, with 6,314 units sold, a 3.6% decrease year-on-year (y-o-y) from 6,547 transactions in the fourth quarter of 2023. This is also a significant drop of 22.5% q-o-q, from 8,142 units sold in the third quarter of 2024.
Sun attributes the decline in HDB resale transactions primarily to the launch of over 8,500 new flats in the October Build-to-Order (BTO) exercise, with many units in prime and desirable locations. She explains that 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 also notes that the seasonal year-end school holidays, when many Singaporeans tend to travel abroad, also contributed to the decline in sales and slower growth in the HDB resale price index.
Government Intervention may be Contributing to Slower Growth
Wong Siew Ying, the head of research and content at PropNex, believes that government intervention in August 2024, when the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%, may also be contributing to the slower pace of growth in the fourth quarter of 2024. She explains that with weaker sales and slower growth in the HDB resale price index, the August 2024 measures are likely to be working through the market, and the thinner resale volume during the quarter may have put a drag on prices.
Resale Volume and Number of Million-Dollar Flat Transactions Decrease in the Fourth Quarter of 2024
The total resale volume for 2024 was 28,876 units, which is an 8% increase from the 26,735 units recorded in 2023, and the 27,896 units sold in 2022. However, it is still lower than the peak of 31,017 units sold in 2021.
In the fourth quarter of 2024, the decline in resale transactions also led to a decrease in the number of million-dollar flat transactions, from 331 in the third quarter to 283 units. Despite this drop, 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 the previous year.
Toa Payoh Leads Million-Dollar Resale Flat Deals in the Fourth Quarter of 2024
According to OrangeTee’s Sun, Toa Payoh town had the most million-dollar resale flat transactions in the fourth quarter of 2024, with 58 such deals. 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).
Lim, the key executive officer of ERA Singapore, explains that the new classification of Plus and Prime BTO flats may have driven more homebuyers to seek out HDB resale homes in central locations. These buyers may be unwilling to accept the resale restrictions, such as a 10-year MOP, rental restrictions after MOP, subsidy clawback upon resale, and a resale income cap on future buyers.
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HDB Resale Prices Expected to Continue Rising in 2025
According to OrangeTee, HDB resale prices are expected to continue rising in 2025, but at a slower rate 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, but the degree of price stabilisation will depend on the number of BTO flats the government plans to release in the upcoming years.
HDB Launching its Largest Sale of Balance Flats Exercise in February 2025
HDB is set to launch its largest sale of balance flats (SBF) exercise in February 2025, offering more than 5,500 flats across various towns, according to Lee Sze Teck, a senior director of data analytics at Huttons Asia. He notes that some prospective resale flat buyers may have decided to wait to try their luck, which may further reduce the supply of BTO flats reaching the MOP and draw more buyers to the resale market.
Projected Growth in HDB Resale Prices and Transactions in 2025
ERA expects resale prices to grow at a more measured pace in 2025, with a projected growth of 3% to 6%, due to a reduced supply of flats reaching MOP, which has been a key driver of price growth in recent years. Lim anticipates that the volume of resale transactions will reach 26,000 to 27,000 units by the end of 2025.
On the other hand, PropNex expects the HDB resale market to perform well in 2025, with a projected growth of 5% to 7% in resale flat prices. Wong explains that the market will be underpinned by healthy housing demand and fewer MOP flats coming on – possibly keeping resale prices firm. She projects that the resale volume will reach 29,000 to 30,000 units in 2025.
Huttons projects that HDB resale flat transactions will end the year at 26,000 to 28,000 units, with a projected growth of 5% to 8% in resale flat prices. Lee also adds that the supply of BTO flats in 2025 will be further reduced to 17,290 units, which is approximately 12% lower than the supply in 2024. This may also lead to a stabilized million-dollar flat market, with 900 to 1,200 units expected to be sold in 2025.