SINGAPORE (EDGEPROP) - HDB resale flat prices continued growing for the 17th consecutive quarter in 2Q2024. Flash estimates released by HDB on July 1 show that resale prices rose by 2.1% q-o-q in 2Q2024, accelerating from the 1.8% q-o-q increase charted in 1Q2024.

This is also the fastest quarterly growth since 4Q2022, which saw a 2.3% q-o-q increase.

The faster growth in resale flat prices comes off the back of a surge in demand for resale flats in 2Q2024. This follows a reduction in the frequency of Build-to-Order (BTO) sales launches from four to three times a year and the Sales of Balance Flat (SBF) exercise limited to once a year, notes Christine Sun, chief researcher and strategist at Orange Tee & Tie.

Additionally, the increased housing grants for eligible homebuyers have made resale flats more accessible and affordable to homebuyers, especially young couples, Sun adds. She also observes a growing number of private property homeowners returning to the resale market after completing the mandatory 15-month wait-out period for those who want to downgrade to a resale flat.

Read also: First million-dollar resale flat in Sengkang sold

Year-to-date, resale flat prices have grown by 4%. This surpasses the 2.5% growth recorded in 1H2023 but is slower than the 5.3% growth logged in 1H2022.

Resale flat transaction volume grows

A total of 7,208 resale flat transactions were recorded by HDB in 2Q2024. This is 2% higher q-o-q compared to the 7,068 transactions logged in 1Q2024.

Mohan Sandrasegeran, head of research and data analytics at SRI, notes that resale flat transaction volume grew despite factors that were expected to moderate the market. This includes the June school holidays and the final BTO launch before the new classification system of Standard, Plus and Prime flats takes effect in October, which was anticipated to draw potential buyers away from the resale market. “Despite these factors, the resilience of the resale market is evident, reflecting strong demand and continued interest in resale flats,” he remarks.

Lee Sze Teck, senior director of data analytics at Huttons Asia, adds that unsuccessful applicants for the February 2024 SBF exercise turned towards the resale market, contributing to the higher 2Q2024 volume.

Lee notes that buyers were interested in resale flats in mature estates, particularly those close to a Prime Location Public Housing (PLH) BTO development, as they would not be subjected to PLH restrictions. The demand was reflected in the split of transactions: 40.2% of resale flat sales in 2Q2024 occurred in mature estates, rising from 37.6% in 1Q2024.

On a y-o-y basis, resale flat volume surged 14.5% higher than the 6,297 sales recorded in the same period last year. 

Read also: Five-room DBSS flat in Toa Payoh sells for record $1.56 mil; 470 million-dollar HDB sales in 2023

Significant rise in million-dollar HDBs

The flash estimates indicate a 29% q-o-q growth in resale flat transactions surpassing the million-dollar mark, from 183 in 1Q2024 to 236 transactions in 2Q2024. This is the highest number of million-dollar transactions in a single quarter to date, says Sandrasegeran.

The Kallang/Whampoa housing estate saw the highest number of such transactions, likely due to the higher number of newer flats reaching their minimum occupation period (MOP), which is more attractive to buyers than older properties, Sandrasegeran notes.

The highest transacted million-dollar deal in 2Q2024 was a five-room flat at 96A Henderson Road in City Vue @ Henderson, and a five-room flat at 9B Boon Tiong Road at Tiong Bahru View. Both are newer flats and were each transacted at $1.588 million.

More resale activity in coming months

Looking ahead, HDB says that about 8,500 BTO flats in Ang Mo Kio, Bedok, Bukit Batok, Geylang, Jurong West, Kallang/Whampoa, Pasir Ris, Sengkang and Woodlands will be offered in the upcoming October BTO exercise. The flats will be classified under the new system and introduce Plus flats, which are near MRT stations and town centres but come with tighter resale conditions, including a 10-year MOP.

As there is no BTO exercise in the third quarter of the year, ERA Singapore’s KEO Eugene Lim expects more buyer activity in the HDB resale market. Sandrasegeran concurs, adding that fewer flats will reach MOP in 2024 compared to last year, further propelling interest in resale flats.

OrangeTee & Tie’s Sun notes that consumer confidence and buying sentiment are expected to remain positive, despite an uncertain interest rate environment. She maintains her resale flat price growth projection of 5% for the whole year.

Read also: HDB flash estimates show resale prices up 1% q-o-q in 4Q2023, and 4.8% y-o-y for the whole year

Meanwhile, Huttons Asia’s Lee has revised his full-year price and volume growth predictions for the resale market, given the bigger volume of transactions recorded in 1H2024. He estimates resale flat prices will grow by 8% in 2024, higher than his previous prediction of 3% to 5%, while transaction volume is expected to clock in between 26,000 and 28,000.