Toa Payoh town led million-dollar resale flats deals in 4Q2024, with 58 such transactions (Photo: Samuel Isaac Chua/EdgeProp Singapore)
HDB flash estimates released on Jan 2 indicate that resale flat prices rose by 2.5% q-o-q in 4Q2024, slowing slightly from the 2.7% q-o-q growth recorded in the previous quarter. It marks the 19th consecutive quarter of price increases in the HDB resale segment.
The flash estimates showed that HDB resale prices grew by 9.6% in 2024, doubling the 4.9% growth in 2023. However, it was still slower than the 10.4% price increase in 2022 and the 12.7% growth in 2021, says Christine Sun, chief researcher and strategist at OrangeTee Group.
Source: HDB
HDB caveat data from data.gov.sg downloaded at 8.15am on Jan 2, showed a slowdown in price growth for some flat types, notes OrangeTee. For example, the median price of four-room flats saw a q-o-q increase of 2.5% in 4Q2024, a slower pace than the 3.4% growth in 3Q2024.
Read also: Record-breaking 1,000 HDB resale flats hit $1 mil in 2024
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 declined by 3.6% y-o-y to 6,314 units in 4Q2024 from 6,547 transactions in 4Q2023. It was down 22.5% q-o-q from 8,142 units in 3Q2024.
Sun attributes the decline in HDB resale transactions primarily to HDB launching over 8,500 new flats in the October Build-to-Order (BTO) exercise, with many units in prime and desirable locations. "The attractive features of these flats, including scenic views and proximity to MRT stations, diverted demand away from the resale market towards the BTO market," she adds.
Sales also slowed during the seasonal year-end school holidays, when many Singaporeans tend to travel abroad. 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 4Q2024 to government intervention in August 2024, when the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. "Going by the weaker sales and slower growth in the HDB resale price index in 4Q2024, the August 2024 measures are likely to be working through the market," says Wong. "Meanwhile, the thinner resale volume during the quarter also likely put a drag on prices".
Read also: ANALYSIS: HDB towns with the highest number of million-dollar deals
The total resale volume in 2024 was 28,876 units, 8% higher than the 26,735 units recorded last year and the 27,896 units in 2022. However, it is still lower than the peak of 31,017 units in 2021.
Source: PropNex Research, data.gov.sg (*data up till 31 Dec, retrieved on 2 Jan 2025)
The decline in resale transactions in 4Q2024 led to a decrease in million-dollar flat transactions to just 283 units from 331 in 3Q2024. Despite the drop, the total number of million-dollar transactions reached a record high of 1,033 units in 2024, notes OrangeTee's Sun. "The figure is more than double the 469 million-dollar transactions recorded in the previous year," she points out.
Toa Payoh town led million-dollar resale flats deals in 4Q2024, with 58 such transactions – 20 of which 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).
* Based on caveats and may differ from actual numbers. Source: HDB, Huttons Data Analytics as of 31 Dec 2024
"The new classification of Plus and Prime classification BTO flats may have driven more homebuyers to seek out HDB resale homes in central locations," says Eugene Lim, key executive officer of ERA Singapore. "These buyers are 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."
HDB resale prices are expected to continue rising in 2025, but at a slower rate than in previous years, says OrangeTee. "In many areas, prices have already reached new highs, creating affordability concerns for many potential buyers," adds Sun.
Furthermore, she adds 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.
Read also: ANALYSIS: BTO or Resale?
In February 2025, HDB will launch its largest sale of balance flats (SBF) exercise, offering more than 5,500 flats across various towns, says Lee Sze Teck, senior director of data analytics, Huttons Asia. "Some prospective resale flat buyers have decided to wait to try their luck," he adds.
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, notes ERA's Lim. Hence, he anticipates a 3% to 6% growth in HDB resale prices, with 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, underpinned by healthy housing demand and fewer MOP flats coming on – possibly keeping resale prices firm, says Wong. "Resale flats will continue to enjoy strong buying interest from those with more pressing housing needs, applicants who cannot secure a BTO flat, and families with a tighter housing budget."
Wong is projecting that HDB resale flat prices may rise 5% to 7% in 2025, supported by a resale volume forecast of 29,000 to 30,000 units.
The supply of BTO flats in 2025 will be further reduced to 17,290 units, about 12% lower than the supply in 2024, notes Huttons' Lee. "As there is no upfront information on the BTO projects with a shorter waiting time, buyers are likely to go to the resale market," he reckons.
Interest rates could go lower in 2025, allowing buyers to take on a more sizeable loan amount to buy a new home. "Some buyers may set their sights on either an executive condo (EC) or a resale condo," adds Lee. "The million-dollar flat market may stabilise in the range of 900 to 1,200 units in 2025."
Huttons projects that HDB resale flat transactions will end the year at 26,000 to 28,000, with resale flat prices likely to grow at a slower pace of 5% to 8%.
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