on an 857 sqft areaIs it a Good Deal?: $555,000 for a three-room HDB flat at Bedok with a 999-year lease and 731 sqft area
HDB’s flash estimates released on January 2nd reported a 2.5% increase in resale flat prices 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 gains in the HDB resale market. The estimates also show a 9.6% increase in HDB resale prices for the entire year of 2024, double the 4.9% growth seen in 2023. However, this is still lower than the 10.4% increase in 2022 and 12.7% growth in 2021, according to Christine Sun, chief researcher and strategist at OrangeTee Group.
The latest HDB resale data from data.gov.sg, downloaded at 8.15am on January 2nd, showed a slowdown in price growth for some flat types, according to OrangeTee. For instance, the median price of four-room flats saw a 2.5% increase in the fourth quarter of 2024, compared to the 3.4% growth seen in the third quarter of the same year. In a similar vein, two-room flats saw a 2% increase in prices in the fourth quarter of 2024, compared to the 3.9% growth in the previous quarter. Meanwhile, executive flats experienced a 1.2% increase in prices in the fourth quarter of 2024, compared to 1.7% in the third quarter.
However, the prices for five-room flats saw a faster growth of 3.2% in the fourth quarter of 2024, compared to the 1.2% increase in the third quarter.
Resale volume in the fourth quarter of 2024 decreased by 3.6% year-on-year to 6,314 units, compared to 6,547 transactions in the fourth quarter of 2023. This is also a 22.5% decrease from the third quarter of 2024, where 8,142 units were transacted. Sun attributes the decrease in HDB resale transactions to the launch of over 8,500 new flats in the October Build-to-Order (BTO) exercise, many of which were located in prime and desirable locations. “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,” she explains. Additionally, the slowdown in sales during the year-end school holidays, when many Singaporeans travel abroad, also contributed to the decrease in transactions.
On the other hand, Wong Siew Ying, head of research and content at PropNex, attributes the slower price growth in the fourth quarter of 2024 to government intervention in August 2024, when the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. “Based on the weaker sales and slower growth in the HDB resale price index in the fourth quarter of 2024, it is likely that the August 2024 measures are taking effect in the market,” Wong explains. “Moreover, the decrease in resale volume during the quarter also put a damper on prices.”
In 2024, a total of 28,876 HDB resale units were transacted, an 8% increase from the 26,735 units sold in 2023 and 27,896 units in 2022. However, this is still lower than the peak of 31,017 units seen in 2021.
The number of million-dollar flat transactions also decreased in the fourth quarter of 2024 to 283 units, compared to 331 units in the third quarter. However, the total number of million-dollar transactions recorded a record high of 1,033 units in 2024, more than double the 469 transactions in the previous year, according to OrangeTee’s Sun. In the fourth quarter of 2024, Toa Payoh town saw the most million-dollar resale flat deals with 58 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).
“The introduction of the Plus and Prime classification for BTO flats may have attracted more homebuyers to look for HDB resale homes in central locations,” Eugene Lim, key executive officer of ERA Singapore, notes. “These buyers are not willing to accept the resale restrictions, such as a 10-year MOP, rental restrictions after MOP, subsidy clawback upon resale and resale income cap for future buyers.”
OrangeTee predicts that HDB resale prices will continue to increase in 2025, but at a slower pace than previous years. “In many areas, prices have already reached new highs, causing affordability concerns for many potential buyers,” Sun comments. She also adds that the continued supply of BTO flats is likely to moderate price growth in the secondary market. However, the extent of this stabilisation will depend on the number of BTO flats that the government plans to release in the upcoming years.
Additionally, in February 2025, HDB is scheduled to launch its largest sale of balance flats (SBF) exercise, offering more than 5,500 flats in various towns, Lee Sze Teck, senior director of data analytics at Huttons Asia, points out. “Some prospective resale flat buyers may choose to wait and try their luck,” he suggests.
ERA expects HDB resale prices to grow at a more moderate pace in 2025 as the supply of flats reaching MOP, which has been a key driver of price growth in recent years, is expected to decrease. Therefore, Lim projects a 3% to 6% increase 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 continue performing well in 2025, supported by robust housing demand and fewer MOP flats coming onto the market. “Resale flats will continue to attract strong interest from those with more urgent housing needs, applicants who are unable to secure a BTO flat, and families with tighter housing budgets,” Wong comments. She predicts that HDB resale flat prices may see a 5% to 7% increase in 2025, with 29,000 to 30,000 units transacted.
The supply of BTO flats is expected to decrease to 17,290 units in 2025, about 12% lower than the supply in 2024, according to Huttons’ Lee. As there is currently no information on the BTO projects that will have a shorter waiting time, buyers are likely to turn to the resale market, he notes.
Additionally, interest rates are expected to decrease in 2025, allowing buyers to take on larger loans to purchase a new home. “Some buyers may consider an executive condo (EC) or a resale condo,” Lee adds. He also predicts that the million-dollar flat market may stabilise at 900 to 1,200 units in 2025. Huttons projects HDB resale transactions to reach 26,000 to 28,000 units by the end of 2025, with resale flat prices expected to increase at a slower pace of 5% to 8%.