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According to the HDB flash estimates released on Jan 2, the resale flat prices rose by 2.5% quarter-on-quarter (q-o-q) in 4Q2024, demonstrating a slight decrease from the 2.7% q-o-q growth recorded in the previous quarter. This marks the 19th consecutive quarter of price escalations in the HDB resale segment. The flash estimates revealed that the resale prices of HDB units increased by 9.6% in 2024, which is twice the growth of 4.9% recorded in 2023. However, the growth rate was still lower in comparison to the 10.4% increase in 2022 and the 12.7% escalation in 2021, as stated by Christine Sun, the chief researcher and strategist at OrangeTee Group.
The HDB caveat data extracted from data.gov.sg at 8.15am on Jan 2 indicated a slowdown in the price growth of some types of flats, as noted by OrangeTee. For instance, the median price of four-room flats registered a q-o-q increase of 2.5% in 4Q2024, which was a slower pace in comparison to the 3.4% rise recorded in 3Q2024. In a similar manner, the prices of two-room flats grew by 2% q-o-q in 4Q2024, which was slower than the 3.9% ascent witnessed in 3Q2024. Executive flats displayed a q-o-q price increase of 1.2% in 4Q2024, in contrast to the 1.7% surge in the previous quarter. On the other hand, the prices for five-room flats climbed 3.2% in 4Q2024, which was a faster growth rate when compared to the modest 1.2% escalation witnessed in 3Q2024.
Resale transactions volume decreased by 3.6% year-on-year (y-o-y) in 4Q2024
In 4Q2024, the resale transactions volume witnessed a y-o-y decline of 3.6%, with 6,314 units transacted, in comparison to the 6,547 units sold in 4Q2023. It observed a q-o-q drop of 22.5% from 8,142 units in 3Q2024 to the current 6,314 units.
Sun attributed the decrease in HDB resale transactions to the overwhelming launch of over 8,500 new flats during the October Build-to-Order (BTO) exercise, with most of the units located in key and highly sought-after locations. She stated, “The appealing features of these flats, including a scenic view and proximity to MRT stations, have diverted demand towards the BTO market, away from the resale market.” According to her, during the seasonal year-end school holidays, most Singaporeans travel abroad, resulting in the decline of house viewings and sales activities during this period.
Wong Siew Ying, the head of research and content at PropNex, asserted that the relatively slow growth in 4Q2024 was the result of the government intervention in August 2024. In this regard, the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. She seems confident that the previously mentioned measures are taking effect, stating that the weaker sales and slow growth in the HDB resale price index in 4Q2024 are likely to be the result of the measures. She added, “Moreover, the lower resale volume during the quarter may have contributed to the sluggish growth in prices.”
Resale volume of million-dollar flats witnessed a decline in 4Q2024
The decline in resale transactions volume in 4Q2024 resulted in a decrease in the volume of transactions for million-dollar flats. It observed the sale of only 283 units, down from 331 units in 3Q2024. However, it recorded the highest number of transactions for million-dollar flats, i.e. 1,033 units in 2024. Sun from OrangeTee observed that the previously mentioned figures have doubled from the 469 million-dollar transactions observed in the previous year.
Toa Payoh displayed the most transactions for million-dollar resale flats in 4Q2024, with 58 of them sold. Twenty of these units belonged to four- and five-room flats at Alkaff Vista in Bidadari Park Drive, as they have recently surpassed the minimum occupation period (MOP).
“The new classification of Plus and Prime classification BTO flats may have contributed to the rise in HDB resale home purchases in central locations,” declared Eugene Lim, the key executive officer at ERA Singapore. He added that these buyers are unwilling to comply with the resale restrictions like the 10-year MOP, rental restrictions after MOP, subsidy clawback upon resale, and resale income cap on future buyers.
OrangeTee has projected that HDB resale prices will continue to rise but at a slower rate in 2025. Prices have already reached new highs in most areas, resulting in affordability concerns for potential buyers. As per Sun, the ongoing supply of BTO flats is expected to moderate the price growth in the secondary market. However, the degree of price stabilisation will depend on the number of BTO flats released in the upcoming years.
In February 2025, HDB will conduct the largest sale of balance flats (SBF) exercise, offering over 5,500 flats across various towns. Lee Sze Teck, the senior director of data analytics at Huttons Asia, added, “Some potential resale flat buyers are waiting for their luck to strike, while others may opt for BTO flats.”
Agreeing with Lee, housing demand is anticipated to remain strong, supporting the HDB resale market in 2025. Hence, prices of resale flats are likely to stay firm, as noted by Wong from PropNex. She believes that the resale flats will continue to grab the interest of those in dire need of housing, applicants who are unable to secure a BTO flat, and families with a tight housing budget. PropNex anticipated that the HDB resale flat prices would record a growth rate of 5% to 7% in 2025, coupled with the predicted resale volume of 29,000 to 30,000 units.
The supply of BTO flats in 2025 is expected to fall to 17,290 units, which is approximately 12% lower in comparison to 2024’s supply. As there is currently no upfront information regarding the BTO projects with a shorter waiting time, buyers are likely to turn to the resale market, as noted by Lee. He further added that, due to the lower interest rates that are expected to continue in 2025, prospective buyers may opt for executive condo (EC) or resale condos. As per his projections, the million-dollar flat market may register stabilisation within the range of 900 to 1,200 units in 2025. According to Huttons, HDB resale flat transactions may reach 26,000 to 28,000 by the end of 2025, with a slower growth rate of 5% to 8% in the prices of resale flats.