Is it a good deal: $608,000 for a four-room HDB flat in Punggol Is it a good deal: $268,000 for a five-room HDB flat on the 17th floor of Anchorvale Drive?
On January 2, the Housing and Development Board (HDB) released flash estimates for the resale flat market, showing a 2.5% quarter-on-quarter (q-o-q) increase in prices in the fourth quarter of 2024. This growth is slightly lower than the 2.7% q-o-q increase recorded in the previous quarter. The 19th consecutive quarter of price growth in the HDB resale segment was marked by these estimates.
The flash estimates also revealed that HDB resale prices rose by 9.6% in 2024, double 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, according to Christine Sun, chief researcher and strategist at OrangeTee Group.
According to OrangeTee, HDB caveat data from data.gov.sg that was downloaded at 8.15am on January 2 showed a slowdown in price growth for certain flat types. For instance, the median price of four-room flats saw a q-o-q increase of 2.5% in the fourth quarter of 2024, slower than the 3.4% growth in the third quarter of the same year.
Similarly, two-room flats recorded a 2% q-o-q price increase in the fourth quarter of 2024, also slower than the 3.9% growth in the previous quarter. Meanwhile, executive flats saw a 1.2% q-o-q price increase in the fourth quarter of 2024, compared to 1.7% in the previous quarter. On the other hand, prices for five-room flats grew 3.2% in the fourth quarter of 2024, faster than the 1.2% increase in the third quarter of 2024.
The resale volume decreased by 3.6% year-on-year (y-o-y) in the fourth quarter of 2024, from 6,547 transactions in the same quarter of 2023 to 6,314 units. This is a 22.5% q-o-q decline from the 8,142 units recorded in the third quarter of 2024. Sun attributes this decline 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 adds that the attractive features of these flats, such as scenic views and proximity to MRT stations, redirected demand away from the resale market towards the BTO market.
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The holiday season may have also contributed to the decline in sales as many Singaporeans tend to travel abroad during this time. 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 the fourth quarter of 2024 to government intervention in August that year. As the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%, Wong believes that the measures are likely to be affecting the market. She also notes that the lower resale volume during this period may have affected price growth.
The total resale volume in 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.
The decline in resale transactions also led to a decrease in million-dollar flat transactions in the fourth quarter of 2024, with only 283 units transacted compared to 331 units in the third quarter of the same year. Despite the drop, the total number of million-dollar transactions reached a record high of 1,033 units in 2024, according to OrangeTee.
Toa Payoh town recorded the highest number of million-dollar resale flat transactions in the fourth quarter of 2024, with 58 units. 20 of these units were four- and five-room flats 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, believes that the new Plus and Prime classification of BTO flats may have influenced buyers to turn to HDB resale homes in central locations. He adds that these buyers are not willing to compromise on the resale restrictions, such as a 10-year MOP, rental restrictions after MOP, subsidy clawback upon resale, and a resale income cap for future buyers.
Sun forecasts that HDB resale prices will continue to rise in 2025, although at a slower rate compared to previous years. She also adds that prices have already reached new highs in many areas, causing concerns about affordability for potential buyers. Furthermore, the ongoing supply of BTO flats may help moderate price growth in the secondary market, although the extent of price stabilization will depend on the number of BTO flats released in the coming years.
In February 2025, HDB will launch its largest sale of balance flats (SBF) exercise, offering more than 5,500 flats across various towns, according to Lee Sze Teck, senior director of data analytics at Huttons Asia. He suggests that some prospective resale flat buyers may choose to wait and try their luck. He also foresees that interest rates may lower in 2025, allowing buyers to take on larger loans to purchase new homes. As a result, buyers may consider executive condominiums (EC) or resale condominiums. The million-dollar flat market may stabilize between 900 and 1,200 units in 2025, according to Lee.
Lim expects resale prices to grow at a more measured pace in 2025, with a reduced supply of flats reaching MOP, which has been a key driver of price growth in recent years. He foresees a growth of 3% to 6% in HDB resale prices, with 26,000 to 27,000 units transacted by the end of 2025. Meanwhile, Wong believes that the HDB resale market will perform well in 2025, supported by healthy housing demand and a smaller supply of flats reaching MOP. She also predicts a growth of 5% to 7% in resale prices and a resale volume of 29,000 to 30,000 units.
According to Lee, the supply of BTO flats in 2025 will be further reduced to 17,290 units, about 12% lower than the supply in 2024. As there is no upfront information on the BTO projects with shorter waiting times, buyers may turn to the resale market, he says. He forecasts that HDB resale flat transactions will end the year at 26,000 to 28,000, with a slower price growth of 5% to 8%.