According to the latest HDB flash estimates released on Jan 2, resale flat prices increased by 2.5% in the fourth quarter of 2024, slightly slower than the 2.7% growth seen in the previous quarter. This marks the 19th consecutive quarter of price increases in the HDB resale segment.
The flash estimates also showed a 9.6% growth in HDB resale prices for the whole of 2024, doubling the 4.9% increase seen in 2023. However, this growth was still lower than the 10.4% and 12.7% recorded in 2022 and 2021 respectively. According to Christine Sun, chief researcher and strategist at OrangeTee Group, this could be due to the various cooling measures implemented by the government in recent years.
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Based on data from data.gov.sg, there has been a slowdown in price growth for some flat types. For example, four-room flats saw a 2.5% increase in median prices in the fourth quarter of 2024, compared to 3.4% in the previous quarter. Similarly, two-room flats recorded a growth of 2%, slower than the 3.9% seen in the third quarter. Executive flats also saw a decrease in price growth, from 1.7% in the previous quarter to 1.2% in the fourth quarter.
In contrast, prices for five-room flats grew by 3.2% in the fourth quarter, a faster pace compared to the 1.2% growth seen in the third quarter.
The resale volume also decreased by 3.6% year-on-year in the fourth quarter of 2024, with 6,314 units sold compared to 6,547 units in the same period in 2023. This was also a 22.5% decrease from the previous quarter, where 8,142 units were sold. According to Sun, the decline in volume can be attributed to the launch of more than 8,500 new flats in the October Build-to-Order (BTO) exercise, which resulted in a diversion of demand away from the resale market. She also noted that the holiday season may have contributed to the decrease in sales activities.
However, Wong Siew Ying, head of research and content at PropNex, believes that the slower pace of growth in the fourth quarter of 2024 could be due to government intervention in August, when the loan-to-value (LTV) limit for HDB loans was reduced to 75%. This measure may have had a dampening effect on sales and prices.
Despite the decrease in resale volume in the fourth quarter, the total number of resale transactions for the whole of 2024 was 28,876 units, surpassing the 26,735 units in 2023 and 27,896 units in 2022. However, it was still lower than the peak of 31,017 units in 2021.
The decline in resale transactions also led to a decrease in the number of million-dollar flat deals, from 331 in the third quarter to 283 in the fourth quarter. Nevertheless, the total number of million-dollar transactions reached a record high of 1,033 units in 2024, more than double the 469 units seen in 2023. Toa Payoh town led the way with 58 million-dollar flat transactions in the fourth quarter of 2024, with 20 of those coming from four- and five-room units at Alkaff Vista in Bidadari Park Drive. This could be due to the new Plus and Prime classification of BTO flats, which attracted buyers looking for central locations and were not willing to deal with resale restrictions.
OrangeTee’s Sun expects HDB resale prices to continue rising in 2025, but at a slower pace than previous years. She believes that prices have already reached new highs in many areas, causing affordability concerns for homebuyers. The ongoing supply of BTO flats is also expected to moderate price growth in the resale market, but the extent of the stabilisation 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 exercise, offering more than 5,500 units across various towns. Eugene Lim, key executive officer of ERA Singapore, believes that some prospective resale flat buyers may wait for this opportunity. HDB resale prices are expected to grow at a more measured pace in 2025, with PropNex projecting a 3% to 6% increase and ERA projecting a 5% to 7% increase. The resale volume forecasted by PropNex is between 29,000 to 30,000 units, while ERA expects 26,000 to 27,000 units to change hands by the end of 2025.
As the supply of BTO flats is expected to decrease in 2025, Huttons Asia’s senior director of data analytics, Lee Sze Teck, predicts that some buyers may turn to the resale market instead. He also believes that interest rates may decrease, allowing buyers to take on larger loans to buy new homes. This could lead to a stabilisation of the million-dollar flat market, with Lee projecting 900 to 1,200 transactions in 2025. Huttons also expects resale flat prices to grow at a slower pace of 5% to 8%, with a resale volume forecast of 26,000 to 28,000 units.