The latest HDB flash estimates, released on January 2, reveal a 2.5% quarter-on-quarter growth in resale flat prices for the fourth quarter of 2024. This marks the 19th consecutive quarter of growth in the HDB resale segment, although it is a slight deceleration from the 2.7% growth recorded in the previous quarter. It is clear that the resale market continues to experience a positive trend.
The flash estimates also showed that HDB resale prices in 2024 increased by 9.6%, which is double the growth rate seen in 2023. This is still slower than the growth rates in 2022 (10.4%) and 2021 (12.7%). According to Christine Sun, chief researcher and strategist at OrangeTee Group, this is a sign that the HDB resale market is still performing well.
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However, data from data.gov.sg downloaded at 8.15am on January 2 showed a slowdown in price growth for some flat types, notes OrangeTee. For instance, the median price of four-room flats only saw a 2.5% quarter-on-quarter increase in the fourth quarter of 2024, compared to a 3.4% growth in the previous quarter.
Similarly, two-room flats registered a 2% quarter-on-quarter increase in the fourth quarter of 2024, which is slower than the 3.9% growth seen in the previous quarter. Meanwhile, executive flats recorded a 1.2% quarter-on-quarter price increase in the fourth quarter of 2024, compared to a 1.7% growth in the third quarter.
On the other hand, prices for five-room flats rose by 3.2% in the fourth quarter of 2024, faster than the 1.2% growth in the third quarter.
Resale volume down, possibly due to seasonal dip and government intervention
According to the HDB caveat data from data.gov.sg, downloaded on January 2 at 8.15am, there was a decline in resale volume by 3.6% year-on-year in the fourth quarter of 2024, with only 6,314 units transacted compared to 6,547 transactions in the same period in 2023. The resale volume was also down by 22.5% quarter-on-quarter, from 8,142 units in the third quarter of 2024.
Sun attributes this decline in resale transactions to various factors. One possible reason is the launch of over 8,500 new flats in the October 2024 Build-to-Order (BTO) exercise, with many of these units in prime and desirable locations. This may have diverted demand away from the resale market towards the BTO market, as these new flats come with attractive features such as scenic views and proximity to MRT stations.
Additionally, the seasonal year-end school holidays may have also contributed to the decrease in sales volume. During this period, many Singaporeans tend to travel abroad, resulting in a decrease in house viewings and sales activities.
Furthermore, Wong Siew Ying, head of research and content at PropNex, believes that the slower pace of growth in the fourth quarter of 2024 could also be attributed to government intervention. In August 2024, the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. This could be why sales have slowed down and price growth has decelerated.
Resale volume still higher than previous years, but below peak levels
While the total resale volume in 2024 was 28,876 units, which is 8% higher than the 26,735 units recorded in the previous year, it is still lower than the peak of 31,017 units in 2021.
The decline in million-dollar flat transactions in the fourth quarter of 2024
The decline in resale transactions in the fourth quarter of 2024 also led to a decrease in million-dollar flat transactions, with only 283 units transacted compared to 331 units in the previous quarter. Despite the drop, the total number of million-dollar transactions reached a record high of 1,033 units in 2024, which is more than double the 469 million-dollar transactions recorded in the previous year, according to OrangeTee’s Sun.
Toa Payoh leads in million-dollar resale flat deals
Based on caveats and may differ from actual numbers, Toa Payoh town had the highest number of million-dollar resale flat transactions in the fourth quarter of 2024, with 58 such transactions. Out of these, 20 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).
According to Eugene Lim, key executive officer of ERA Singapore, the new classification of Plus and Prime classification BTO flats may have driven more homebuyers to seek out HDB resale homes in central locations. These buyers are unwilling to accept 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.
Expectations for 2025: Slower price growth and moderated transaction volume
It is projected that HDB resale prices will continue to rise in 2025, however, at a slower pace than in previous years. According to OrangeTee, prices have already reached new highs in many areas, which creates affordability concerns for potential buyers. Furthermore, the ongoing supply of BTO flats is expected to help moderate price growth in the secondary market. However, the extent of price stabilisation will depend on the number of BTO flats that the government plans to release in the upcoming years.
In February 2025, HDB is set to 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 at Huttons Asia. This could potentially lead to more buyers waiting to see their luck with the SBF, instead of buying resale flats, which may further drive up prices.
Sun from OrangeTee projects that HDB resale flat prices may rise by 5% to 7% in 2025, with a resale volume forecast of 29,000 to 30,000 units. Lim from ERA, on the other hand, expects resale prices to grow by 3% to 6% and resale volumes to reach 26,000 to 27,000 units.
PropNex’s Wong is also optimistic about the HDB resale market in 2025, projecting a 5% to 8% growth in prices and a resale volume of 26,000 to 28,000 units.
With the supply of BTO flats in 2025 expected to be reduced to 17,290 units, around 12% lower than the supply in 2024, Huttons’ Lee believes that buyers may turn to the resale market instead. Additionally, with potential lower interest rates, some buyers may set their sights on either an executive condo (EC) or a resale condo. As such, he projects that the million-dollar flat market may stabilise in the range of 900 to 1,200 units in 2025.