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The latest HDB flash estimates released on Jan 2 showed that resale flat prices rose by 2.5% q-o-q in 4Q2024, slightly slower than the 2.7% q-o-q growth recorded in the previous quarter. This marks the 19th consecutive quarter of price increases in the HDB resale market.
According to chief researcher and strategist at OrangeTee Group, Christine Sun, the flash estimates indicated that HDB resale prices grew by 9.6% in 2024, which was double the 4.9% growth recorded in 2023. However, this was still slower than the 10.4% price increase in 2022 and the 12.7% growth in 2021.
The HDB caveat data, downloaded from data.gov.sg at 8.15am on Jan 2, showed a slowdown in price growth for some flat types, noted OrangeTee. For instance, the median price of four-room flats saw a q-o-q increase of 2.5% in 4Q2024, which was a slower pace compared to the 3.4% growth recorded in 3Q2024. Similarly, two-room flats rose by 2% q-o-q in 4Q2024, which was slower than the 3.9% growth recorded in 3Q2024. Executive flats registered a 1.2% q-o-q price increase in 4Q2024, compared to the 1.7% q-o-q growth in 3Q2024. However, prices for five-room flats grew 3.2% in 4Q2024, which was faster than the 1.2% increase in 3Q2024.
The 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 attributed 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 located in prime and desirable locations. She added 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, when many Singaporeans tend to travel abroad, also slowed down sales and viewings during this period.
However, Wong Siew Ying, head of research and content at PropNex, attributed 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%. She noted that going by the weaker sales and slower growth in the HDB resale price index in 4Q2024, the August 2024 measures were likely to be working through the market. Moreover, the thinner resale volume during the quarter also likely put a drag on prices.
Despite the decline in resale transactions in 4Q2024, the total number of million-dollar flat transactions reached a record high of 1,033 units in 2024. Toa Payoh town led million-dollar resale flat 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). Eugene Lim, key executive officer of ERA Singapore, suggested 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. He added that these buyers were 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.
OrangeTee expects HDB resale prices to continue rising in 2025, but at a slower rate than in previous years. Sun added that in many areas, prices have already reached new highs, creating affordability concerns for many potential buyers. She noted that the ongoing supply of BTO flats is expected to help moderate price growth in the secondary market. However, the degree of price stabilisation would depend on the number of BTO flats the government plans to release in the upcoming years. In February 2025, HDB will launch its largest sale of balance flats (SBF) exercise, offering more than 5,500 flats across various towns, said Lee Sze Teck, senior director of data analytics, Huttons Asia. He reckoned that some prospective resale flat buyers have decided to wait to try their luck. He added that interest rates could go lower in 2025, allowing buyers to take on a more sizable loan amount to buy a new home. Lee suggested that some buyers may set their sights on either an executive condo (EC) or a resale condo. Moreover, 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%.
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. Eugene Lim 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. Meanwhile, PropNex expects the HDB resale market to perform well in 2025, underpinned by healthy housing demand and fewer MOP flats coming on board. Wong Siew Ying projects 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, around 12% lower than the supply in 2024, noted Huttons’ Lee. He reckoned that as there was no upfront information on the BTO projects with a shorter waiting time, buyers were likely to go to the resale market. As such, the number of million-dollar flat transactions may stabilize in the range of 900 to 1,200 units in 2025.
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