HDB flash estimates released on Jan 2 showed that resale flat prices in the fourth quarter of 2024 rose by 2.5% compared to the previous quarter. This is slightly lower than the 2.7% growth recorded in the previous quarter. It marked 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 also revealed that HDB resale prices grew by 9.6% in 2024, which is double the 4.9% growth seen in 2023. However, it was still slower than the 10.4% increase in 2022 and the 12.7% growth in 2021.
Data from HDB’s website showed a slowdown in price growth for certain flat types based on the HDB caveat downloaded from data.gov.sg at 8.15am on Jan 2. OrangeTee noted that the median price of four-room flats saw a 2.5% increase in the fourth quarter of 2024, which is slower than the 3.4% growth in the previous quarter.
Similarly, the prices of two-room flats rose by 2% in the fourth quarter of 2024, which is also slower than the 3.9% growth in the third quarter of 2024. Executive flats registered a 1.2% price increase in the fourth quarter of 2024, compared to 1.7% in the previous quarter.
However, there was a faster growth rate for five-room flats in the fourth quarter of 2024 at 3.2%, compared to the 1.2% increase in the third quarter of 2024.
Resale volume declined by 3.6% year-on-year in the fourth quarter of 2024
Resale volume fell by 3.6% year-on-year to 6,314 units in the fourth quarter of 2024 from 6,547 transactions in the same period in 2023. It was also down by 22.5% compared to the previous quarter, with 8,142 units being transacted in the third quarter of 2024.
Sun attributes the decline in HDB resale transactions to HDB launching over 8,500 new flats in the October Build-to-Order (BTO) exercise, with many units in prime and desirable locations. She notes that the attractive features of these flats, such as scenic views and proximity to MRT stations, diverted demand away from the resale market towards the BTO market.
Additionally, the seasonal year-end school holidays also contribute to the slower sales, as many Singaporeans tend to travel overseas during this period. As a result, house viewings and sales activities typically decrease during this period.
However, Wong Siew Ying, head of research and content at PropNex, points out that the slower pace of growth in the fourth quarter of 2024 can also be attributed to government intervention in August 2024, when the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. She adds that based on the weaker sales and slower growth in the HDB resale price index in the fourth quarter of 2024, the August 2024 measures are likely to be having an effect on the market. The lower resale volume during the quarter also likely affected prices.
Total resale volume in 2024 was up by 8%
Despite the decline in resale volume in the fourth quarter, the total resale volume in 2024 was up by 8% to 28,876 units, compared to 26,735 units in 2023 and 27,896 units in 2022. However, it is still lower than the peak of 31,017 units in 2021.
The popularity of condos in Singapore is on the rise due to the country’s limited land supply. As a small and densely populated island, finding suitable land for development has posed challenges. To address this issue, the government has imposed strict land use regulations, creating a competitive real estate market that sees continually increasing property prices. This has made investing in real estate, especially condos, a highly attractive option for potential investors, as it offers potential for significant capital growth. With the condo market booming, it is no wonder that demand for these properties continues to soar in Singapore.
OrangeTee’s Sun notes that the upcoming February 2025 sale of balance flats (SBF) exercise will offer more than 5,500 flats across various towns, and this could affect the demand for resale flats. She also points out 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.
Decline in million-dollar flat transactions in the fourth quarter of 2024
The decline in resale transactions in the fourth quarter of 2024 led to a decrease in million-dollar flat transactions to 283 units, from 331 in the previous quarter. Despite the 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 town led million-dollar resale flat deals in the fourth quarter of 2024, with 58 transactions. 20 of these transactions 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).
Eugene Lim, key executive officer of ERA Singapore, suggests that the new classification of Plus and Prime classification 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 resale income cap on future buyers.
Projected growth and transactions for 2025
HDB resale prices are expected to continue rising in 2025, but at a slower rate than in previous years, according to OrangeTee. Sun adds that prices have already reached new highs in many areas, causing affordability concerns for many potential buyers.
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 growth rate of 3% to 6% in HDB resale prices, with 26,000 to 27,000 resale units changing hands by the end of 2025.
On the other hand, PropNex expects the HDB resale market to perform well in 2025, underpinned by healthy housing demand and fewer MOP flats coming on board. They predict that resale prices may rise by 5% to 7%, supported by a projected resale volume of 29,000 to 30,000 units.
Huttons also 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%. Huttons’ Lee Sze Teck notes that the supply of BTO flats in 2025 will be reduced to 17,290 units, 12% lower than the supply in 2024. He adds that buyers may turn to the resale market for homes as there is no upfront information on the BTO projects with a shorter waiting time.
Furthermore, as interest rates are expected to decrease in 2025, buyers may be able to take on a larger loan amount to purchase a new home. This could also lead to an increased demand for executive condos (ECs) or resale condos. Huttons projects that the million-dollar flat market may stabilise in the range of 900 to 1,200 units in 2025.