Resale Flat Prices Rise 25 19Th Straight Quarter Hdb 4Q2024 Flash
Is it a Good Deal?: $880,000 for a five-room HDB flat in Tampines with remaining lease of 95 years
HDB flash estimates released on Jan 2 showed that resale flat prices in Singapore rose by 2.5% from the previous quarter in 4Q2024. This marked the 19th consecutive quarter of price increases in the HDB resale segment, although it was a slight slowdown from the 2.7% growth seen in 3Q2024.
According to Christine Sun, chief researcher and strategist at OrangeTee Group, the flash estimates also revealed a 9.6% increase in HDB resale prices in 2024 compared to the previous year. This was double the 4.9% growth recorded in 2023, but slower than the 10.4% and 12.7% growth in 2022 and 2021 respectively.
However, caveat data from data.gov.sg downloaded at 8.15am on Jan 2 showed a slowdown in price growth for certain flat types, noted OrangeTee. For example, the median price of four-room flats saw a q-o-q increase of 2.5% in 4Q2024, slower than the 3.4% growth in 3Q2024. Similarly, two-room flats rose by 2% q-o-q in 4Q2024, while executive flats registered a 1.2% increase.
On the other hand, prices for five-room flats grew 3.2% in 4Q2024, faster than the 1.2% increase in 3Q2024.
Resale volume down 3.6% y-o-y in 4Q2024
In terms of resale volume, there was a decline of 3.6% y-o-y in 4Q2024 to 6,314 units, down from 6,547 transactions in 4Q2023. The volume was also 22.5% lower compared to the previous quarter (8,142 units in 3Q2024).
According to Sun, the primary reason for this decline is the launch of over 8,500 new BTO flats in October 2024. These new flats, with their attractive features and prime locations, have diverted demand away from the resale market.
Additionally, sales activities during the year-end school holidays, when many Singaporeans travel abroad, were also affected.
Wong Siew Ying, head of research and content at PropNex, also pointed out that the slower growth in 4Q2024 could be attributed to government measures implemented in August 2024, where the LTV limit for HDB loans was reduced by five percentage points to 75%. This could be a sign that these measures are starting to have an impact on the market.
OrangeTee’s Sun notes that the total resale volume for 2024 was 28,876 units, which is 8% higher compared to last year (26,735 units) and 2022 (27,896 units). However, it is still lower than the peak of 31,017 units in 2021.
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Decline in million-dollar flat transactions in 4Q2024
The decline in resale transactions in 4Q2024 also led to a decrease in million-dollar flat transactions to 283 units from 331 in 3Q2024. Despite this, the total number of million-dollar transactions reached a record high of 1,033 units in 2024, notes OrangeTee’s Sun. This is more than double the 469 million-dollar transactions recorded in the previous year.
Toa Payoh town saw the most million-dollar resale flats transactions in 4Q2024, with 58 such transactions. This included 20 four- and five-room units at Alkaff Vista in Bidadari Park Drive, which had just passed the five-year MOP.
Eugene Lim, key executive officer of ERA Singapore, believes that the new classification of Plus and Prime BTO flats may have influenced more homebuyers to turn towards HDB resale flats in central locations. This could be due to their unwillingness to accept the resale restrictions for BTO flats such as the 10-year MOP, rental restrictions after MOP, subsidy clawback upon resale, and resale income cap for future buyers.
Outlook for 2025
OrangeTee expects HDB resale prices to continue rising in 2025, but at a slower pace compared to previous years. This is due to prices already reaching new highs in many areas, causing affordability concerns for potential buyers. Additionally, the ongoing supply of BTO flats may help moderate price growth in the secondary market, but this will depend on the number of BTO flats released in the upcoming years.
In February 2025, HDB will launch its largest exercise for sales of balance flats (SBF), offering more than 5,500 flats across various towns. Lee Sze Teck, senior director of data analytics at Huttons Asia, believes that this could be an opportunity for buyers to try their luck in the resale market.
The supply of BTO flats is expected to decrease to 17,290 units in 2025, notes Huttons’ Lee, who also believes that the interest rates could go lower this year. This could allow buyers to take on larger loans to buy new homes, and some may even consider executive condos or resale condos as alternatives.
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%. On the other hand, ERA expects a 3% to 6% growth in HDB resale prices, with 26,000 to 27,000 resale units changing hands by the end of 2025.