AdvertisementAdvertisement
The latest flash estimates released by HDB on Jan 2 showed that resale flat prices continued to rise in the fourth quarter of 2024, though at a slightly slower pace compared to the previous quarter. This marked the 19th consecutive quarter of price increases in the HDB resale segment. Overall, resale flat prices grew by 2.5% quarter-on-quarter (q-o-q) in the fourth quarter of 2024, compared to a growth of 2.7% q-o-q in the previous quarter.
According to Christine Sun, chief researcher and strategist at OrangeTee Group, the flash estimates showed that HDB resale prices grew by 9.6% in 2024, which is double the 4.9% growth recorded in 2023. However, it was still slower than the 10.4% price increase in 2022 and the 12.7% growth in 2021.
The latest HDB caveat data released by data.gov.sg on Jan 2 also showed a slowdown in price growth for certain flat types. OrangeTee noted that the median price of four-room flats only saw a q-o-q increase of 2.5% in the fourth quarter of 2024, which is a slower pace compared to the 3.4% growth in the previous quarter. Similarly, two-room flats recorded a 2% q-o-q price increase in the fourth quarter of 2024, which is slower than the 3.9% growth in the third quarter of 2024. Meanwhile, executive flats registered a 1.2% q-o-q price increase in the fourth quarter of 2024, compared to the 1.7% growth recorded in the previous quarter.
On the other hand, prices for five-room flats showed significant growth in the fourth quarter of 2024, with a 3.2% q-o-q increase. This is faster than the 1.2% increase recorded in the third quarter of 2024.
In terms of resale volume, there was a decline of 3.6% year-on-year (y-o-y) in the fourth quarter of 2024, with 6,314 units transacted compared to 6,547 units in the same period in 2023. This represents a 22.5% q-o-q decrease from the 8,142 units transacted in the third quarter of 2024. According to Sun, the decline in HDB resale transactions could be attributed to HDB launching over 8,500 new flats in the October Build-to-Order (BTO) exercise, with many units located in prime and desirable locations. This has diverted demand away from the resale market towards the BTO market. The seasonal year-end school holidays, where many Singaporeans typically travel abroad, may have also contributed to the lower resale volume.
Wong Siew Ying, head of research and content at PropNex, also attributes the slower pace of 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, the August 2024 measures are likely to be working through the market. Meanwhile, the thinner resale volume during the quarter also likely put a drag on prices,” she says.
In 2024, the total resale volume reached 28,876 units, which is 8% higher than the 26,735 units transacted in 2023 and the 27,896 units in 2022. However, it is still lower than the peak of 31,017 units transacted in 2021.
The resale market has also recorded a decline in million-dollar transactions in the fourth quarter of 2024. The total resale volume was 1,033 units, which is more than double the 469 million-dollar transactions recorded in the previous year. However, there were only 283 million-dollar transactions in the fourth quarter of 2024, a drop from 331 in the previous quarter. Toa Payoh town recorded the highest number of million-dollar resale flats in the fourth quarter of 2024, with 58 such 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).
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 resale income cap on future buyers.”
The HDB resale market is expected to continue growing, but at a slower rate in 2025, as prices in many areas have reached new highs, making it less affordable for potential buyers. Furthermore, the ongoing supply of BTO flats is expected to help moderate price growth in the secondary market. However, the degree of price stabilisation will depend on the number of BTO flats the government plans to release in the upcoming years. In February 2025, HDB will launch its largest sale of balance flats (SBF) exercise, offering more than 5,500 flats across various towns. “Some prospective resale flat buyers have decided to wait and try their luck,” says Lee Sze Teck, senior director of data analytics at Huttons Asia.
According to ERA’s Lim, HDB resale prices are expected to grow at a more measured pace in 2025 due to a reduced supply of flats reaching MOP, which has been a key driver of price growth in recent years. He anticipates a 3% to 6% growth in HDB resale prices, with 26,000 to 27,000 resale units changing hands by the end of 2025. On the other hand, PropNex expects the HDB resale market to perform well in 2025, with healthy demand and fewer MOP flats coming on – possibly keeping resale prices firm. Wong projects that HDB resale flat prices may rise 5% to 7% in 2025, supported by a resale volume forecast of 29,000 to 30,000 units. 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%.
Investing in a condominium requires careful consideration of its maintenance and management. Most condos come with maintenance fees that are used for the upkeep of shared spaces and amenities. While these fees may increase the overall expenses, they also guarantee the property’s upkeep and market value. Engaging a property management company can aid in handling the daily operations of the condo, transforming it into a more hands-off investment. Keep an eye out for new condo launches at Mentorship Online to expand your investment portfolio.