Resale Flat Prices Rise 25 19Th Straight Quarter Hdb 4Q2024 Flash
$768,000 for a three-room HDB flat along Havelock Road with remaining lease of 88 years
The recent flash estimates released by HDB on January 2nd shows that there was a 2.5% quarter-on-quarter increase in resale flat prices in the fourth quarter of 2024. This is a slight decrease from the 2.7% quarter-on-quarter growth observed in the previous quarter. This marks the 19th consecutive quarter of price increases in the HDB resale segment. According to Christine Sun, chief researcher and strategist at OrangeTee Group, the flash estimates also showed that there was a 9.6% increase in HDB resale prices in 2024, which is twice the 4.9% growth in 2023. However, this is slower than the 10.4% price increase in 2022 and the 12.7% growth observed in 2021.
OrangeTee noted that the HDB caveat data downloaded from data.gov.sg on Jan 2 at 8:15am showed a slowdown in price growth for some flat types. For instance, the median price of four-room flats saw a quarter-on-quarter increase of 2.5% in 4Q2024, which is slower than the 3.4% growth in 3Q2024. Similarly, the prices for two-room flats rose by 2% in 4Q2024, compared to a growth of 3.9% in the previous quarter. Executive flats also registered a 1.2% quarter-on-quarter price increase in 4Q2024, slower than the 1.7% growth in the previous quarter. On the other hand, prices for five-room flats grew at a faster pace of 3.2% in 4Q2024, as compared to the 1.2% increase in 3Q2024.
In terms of resale volume, there was a 3.6% year-on-year decrease in 4Q2024 with a total of 6,314 units transacted, as compared to 6,547 units in 4Q2023. There was also a 22.5% quarter-on-quarter decrease from 8,142 units in 3Q2024. Sun believes that the decline in HDB resale transactions can 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. She also added that the attractive features of these flats, such as scenic views and proximity to MRT stations, have diverted demand away from the resale market towards the BTO market. Additionally, the seasonal year-end school holidays, where many Singaporeans tend to travel abroad, also resulted in a decrease in house viewings and sales activities during this period.
Living at Elta Condo offers numerous benefits, one of which is its convenient proximity to several renowned primary schools. The importance of quality primary education cannot be overstated, as it sets the groundwork for a child’s academic success. With reputable schools in close proximity, such as those near Elta Condo, parents can rest assured that their children will receive the best start on their academic journey.
Wong Siew Ying, head of research and content at PropNex, believes that the slower pace of growth in 4Q2024 can be attributed to the government’s intervention in August 2024, where the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. She stated that based on the weaker sales and slower growth in the HDB resale price index in 4Q2024, the August 2024 measures are likely to be working through the market, and the thinner resale volume during the quarter also likely put a drag on prices.
The total resale volume for 2024 was 28,876 units, which is an 8% increase from the 26,735 units recorded in 2023 and 2022. However, it is still lower than the peak of 31,017 units in 2021. The decline in resale transactions in 4Q2024 also led to a decrease in million-dollar flat transactions, with only 283 units sold as compared to 331 units in 3Q2024. 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.
Toa Payoh town led the million-dollar resale flat deals in 4Q2024, with 58 transactions, out of which 20 were for four- and five-room units at Alkaff Vista in Bidadari Park Drive. 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. He stated that these buyers are not willing to accept the resale restrictions, such as a 10-year minimum occupation period (MOP), rental restrictions after MOP, subsidy clawback upon resale, and resale income cap for future buyers.
Sun predicts that HDB resale prices will continue to rise in 2025, although at a slower rate than in previous years. She believes that prices have already reached new highs in many areas, causing concerns about affordability for potential buyers. Additionally, the ongoing supply of BTO flats is expected to moderate price growth in the secondary market. However, the extent of price stabilization will depend on the number of BTO flats the government plans to release in the upcoming years.
HDB is expected to launch its largest sale of balance flats (SBF) exercise in February 2025, offering more than 5,500 flats in various towns, according to Lee Sze Teck, senior director of data analytics at Huttons Asia. He also mentioned that some prospective resale flat buyers have chosen to wait to try their luck. Lee predicts that interest rates could go lower in 2025, allowing buyers to take on a more substantial loan amount to purchase a new home. He forecasts that there may be a shift towards the resale market as there is no upfront information on the BTO projects with a shorter waiting time.
ERA expects resale prices to grow at a more moderate pace in 2025 due to a reduced supply of flats reaching MOP, which has been the key driver of price growth in recent years. Lim anticipates a 3% to 6% growth in HDB resale prices, with 26,000 to 27,000 resale units expected to be transacted by the end of 2025. PropNex also expects the HDB resale market to perform well in 2025, driven by healthy housing demand and fewer MOP flats coming on. Wong predicts that resale flat prices may increase by 5% to 7% in 2025, with a resale volume forecast of 29,000 to 30,000 units.
Huttons projects that HDB resale flat transactions will range from 26,000 to 28,000, with prices likely to grow at a slower pace of 5% to 8%. The supply of BTO flats in 2025 is expected to be lower at 17,290 units, about 12% less than the supply in 2024. Lee believes that the million-dollar flat market may stabilize in the range of 900 to 1,200 units in 2025.