In the latest flash estimates released by HDB on Jan 2, it was announced that resale flat prices rose by 2.5% quarter-on-quarter during the fourth quarter of 2024. This growth was slightly lower compared to the 2.7% q-o-q increase recorded in the previous quarter, marking the 19th consecutive quarter of price increases in the HDB resale market.
According to Christine Sun, chief researcher and strategist at OrangeTee Group, the flash estimates showed that resale flat prices grew by 9.6% in 2024, doubling the 4.9% growth in 2023. However, this was still slower than the 10.4% price increase in 2022 and the 12.7% growth in 2021.
OrangeTee notes that there was a slowdown in price growth for certain flat types, based on data from HDB’s caveat database on data.gov.sg as of Jan 2 at 8.15am. The median price of four-room flats saw a q-o-q increase of 2.5% in 4Q2024, slightly lower than the 3.4% growth in 3Q2024. Similarly, two-room flats rose by 2% q-o-q in 4Q2024, slower than the 3.9% growth in 3Q2024. Executive flats registered a 1.2% q-o-q price increase in 4Q2024, compared to 1.7% in the previous quarter. In contrast, prices for five-room flats grew 3.2% in 4Q2024, faster than the 1.2% increase in 3Q2024.
Resale volume declines 3.6% y-o-y in 4Q2024
Based on data from the caveat database, OrangeTee notes that resale volume declined by 3.6% y-o-y 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 over 8,500 new Build-to-Order (BTO) flats by HDB in October 2024. Many of these units were located in prime and sought-after locations, drawing demand away from the resale market towards the BTO market.
Sales also slowed down during the year-end school holidays, with many Singaporeans travelling abroad. As a result, house viewings and sales activities typically decrease during this period.
However, Wong Siew Ying, head of research and content at PropNex, notes that the slower pace of growth in 4Q2024 could also be attributed to government intervention in August 2024. This was 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, it appears that the August 2024 measures are taking effect,” says Wong. “In addition, the lower resale volume during the quarter likely also contributed to the slower price growth.”
Resale volume reaches 28,876 units in 2024, down from peak in 2021
The total resale volume for 2024 was 28,876 units, 8% higher than the 26,735 units recorded in 2023 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
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The decline in resale transactions in 4Q2024 also saw a decrease in million-dollar flat transactions, with only 283 such units transacted compared to 331 in 3Q2024. Despite the dip, Sun notes that the total number of million-dollar transactions reached a record high of 1,033 units in 2024, more than doubling the 469 transactions recorded in the previous year.
Toa Payoh leads million-dollar resale flat deals
According to caveats filed, Toa Payoh saw the highest number of million-dollar resale flat transactions in 4Q2024, with 58 units sold. Out of the 58 units, 20 were four- and five-room flats at Alkaff Vista in Bidadari Park Drive, which had recently crossed its five-year minimum occupation period (MOP).
Wong observes that the new Plus and Prime classification of BTO flats could be driving more homebuyers to seek out HDB resale flats in central locations. These buyers are averse to the resale restrictions such as the 10-year MOP, rental restrictions after MOP, subsidy clawback upon resale and resale income cap on future buyers.
HDB resale prices to continue rising in 2025, but at a slower pace
Looking ahead, OrangeTee expects HDB resale prices to continue rising in 2025, but at a slower pace compared to previous years. Prices have already reached new highs in many areas, creating affordability concerns for many potential buyers, says Sun.
She notes that the ongoing supply of BTO flats is expected to help moderate price growth in the secondary market. However, the extent of price stabilisation will depend on the number of BTO flats the government plans to launch in the upcoming years.
HDB’s largest sale of balance flats (SBF) exercise in February
In February 2025, HDB will launch its largest sale of balance flats (SBF) exercise, with more than 5,500 flats available 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.
Interest rates could go lower in 2025
Lim anticipates a more moderate pace of price growth for resale flats in 2025 due to a reduced supply of flats reaching MOP, which has been a key driver of price increases in recent years. He expects resale prices to grow by 3% to 6%, with an estimated 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, driven by healthy housing demand and a lower number of MOP flats entering the market. Wong expects resale flat prices to rise by 5% to 7% in 2025, with a projected resale volume of 29,000 to 30,000 units.
Huttons projects that HDB resale flat transactions will reach 26,000 to 28,000 units in 2025, with prices likely to grow by 5% to 8%. Lee observes that the supply of BTO flats in 2025 will be further reduced to 17,290 units, around 12% lower compared to the previous year. As there is no upfront information on BTO projects with a shorter waiting time, Lee reckons that buyers are likely to turn to the resale market. He expects the million-dollar flat market to stabilise within the range of 900 to 1,200 units in 2025.