When it comes to investing in condominiums in Singapore, one must carefully evaluate the government’s property cooling measures. Over the years, the government has implemented various measures to keep the real estate market steady and discourage speculative buying. For instance, the Additional Buyer’s Stamp Duty (ABSD) has been put in place, which imposes higher taxes on foreign buyers and individuals purchasing multiple properties. While these measures may have a temporary impact on profits, they serve a crucial purpose in maintaining the long-term stability of the market and creating a secure investment environment. Therefore, before considering investing in Singapore Projects, one must carefully weigh these cooling measures.
According to data released by HDB on 24 January, the resale prices for Housing and Development Board (HDB) flats have recorded an increase of 2.6% in the fourth quarter of 2024. This marks the 19th consecutive quarter of price growth in the resale market, bringing the overall price increase for the year to 9.7%. This is almost double the 4.9% year-on-year price increase recorded in 2023.
The rise in resale prices last quarter has seen a slight moderation as compared to the 2.7% quarter-on-quarter increase in the third quarter of 2024. As per Mohan Sandrasegeran, Head of Research & Data Analytics at SRI, the strong growth in resale prices throughout the year can largely be attributed to the limited supply of flats that reached their Minimum Occupation Period (MOP).
Upward pressure on resale prices, particularly for newer flats and larger flat types such as five-room and executive units, were seen due to the strong interest from buyers catering to growing family needs, says Mohan.
Five-room flats recorded the highest resale price growth in the fourth quarter of 2024, increasing by 2.2% quarter-on-quarter to an average of $754,097. Similarly, the average resale price for four-room flats also increased by 2.2% quarter-on-quarter to $652,544 in the same period.
In terms of resale prices in specific areas, the Central Area saw the highest increase, growing by 25.6% quarter-on-quarter. This was followed by Toa Payoh (12.1%), Tampines (6.9%), Bishan (6.7%) and Bedok (6.1%). Christine Sun, Chief Researcher & Strategist at OrangeTee Group, notes that the majority of the transactions in these areas were for five-room and executive flats, which could have contributed to the higher price growth.
The final quarter of 2024 saw a total of 285 HDB resale flats being sold for $1 million or more, bringing the total number of million-dollar HDB resale transactions to 1,035 for the whole year. Lee Sze Teck, Senior Director of Data Analytics at Huttons Asia, says that more than 90% of these transactions took place in mature estates, with the highest number of million-dollar flats changing hands in Kallang/Whampoa (156 units), followed by Toa Payoh (144 units) and Bukit Merah (135 units).
The overall transaction volume for resale flats in 2024 fell by 21.1% quarter-on-quarter, from 8,142 units in the third quarter to 6,424 units in the fourth quarter. According to Lee, the fall in transaction volume could be due to seasonal factors such as the year-end holiday and festive season. The continued low interest rates could also have prompted some buyers to move to the private residential market or the Executive Condominium (EC) market. Additionally, the latest Build-to-Order (BTO) sales exercise in October 2024 could have seen some prospective buyers opting to ballot for a flat instead, says Mohan.
Sengkang, Woodlands, Punggol, Tampines and Yishun were the top five most popular HDB towns among buyers in 2024, accounting for around 35.9% of all HDB resales. Overall, 2024 saw an 8.4% increase in resale transactions from 26,735 units to 28,986 units, marking the largest number of yearly resale transactions since 2021.
Looking ahead, a total of 6,976 flats are expected to reach the end of their Minimum Occupation Period (MOP) in 2025. This is a 41.6% decrease from the 11,952 flats that reached their MOP in 2024, due to the relatively fewer BTO flats completed in 2020 during the pandemic.
HDB has announced plans to launch more than 25,000 new flats across three BTO sales exercises in 2025, comprising 19,600 BTO flats and over 5,500 flats under the Sale of Balance Flats (SBF) exercise. A concurrent launch of 5,000 BTO flats will take place next month alongside the SBF exercise for locations including Kallang/Whampoa, Queenstown, Woodlands, and Yishun. This will be the largest SBF exercise since November 2020, with around 4 in 10 of the flats to be offered already completed.
About 3,800 units of the 19,600 BTO flats for 2025 will be designated as Shorter Waiting Time (SWT) flats, providing wait times of less than three years to cater to the growing demand for housing. According to Mohan, the substantial ramp-up in public housing supply aims to address the increasing demand for housing, with the SWT flats providing a shorter waiting time as compared to the typical BTO process.
Mohan forecasts an increase in resale prices of 3.5% to 5.5% in the HDB market for 2025, with resale transactions ranging from 26,000 to 27,000. On the other hand, Lee projects a more optimistic price increase of between 5% to 8% for 2025.