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On January 2, the Housing and Development Board (HDB) released its flash estimates for the fourth quarter of 2024, revealing a 2.5% quarter-on-quarter (q-o-q) increase in resale flat prices. While this marks the 19th consecutive quarter of price growth in the HDB resale market, it is a slight slowdown from the 2.7% q-o-q growth seen 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 seen in 2023. However, this increase is still lower than the 10.4% recorded in 2022 and the 12.7% growth seen in 2021.
OrangeTee also noted a slowdown in price growth for some flat types based on HDB caveat data from data.gov.sg, which was downloaded on January 2 at 8:15am. For instance, the median price of four-room flats saw a q-o-q increase of 2.5% in 4Q2024, lower than the 3.4% growth seen in 3Q2024.
Similarly, two-room flats saw a slower q-o-q increase of 2% in 4Q2024, compared to 3.9% growth in 3Q2024. Executive flats also saw a decrease in q-o-q price growth from 1.7% in the previous quarter to 1.2% in 4Q2024.
In contrast, prices for five-room flats grew by 3.2% in 4Q2024, which is faster than the 1.2% increase seen in 3Q2024.
When considering investments in Singapore, it is imperative for foreign investors to have a thorough understanding of the regulations and limitations governing property ownership. In contrast to landed properties, condos are usually less restricted for purchase by foreigners. Nevertheless, they are still subject to an Additional Buyer’s Stamp Duty (ABSD) of 20% for their first property acquisition. Despite this added cost, the Singapore real estate market remains an attractive option for foreign investors, given its stability and potential for growth. With condos as a viable option, international investors can still confidently explore opportunities in the Singapore property market.
Resale volume down 3.6% y-o-y in 4Q2024
Compared to the same period in 2023, the resale volume in 4Q2024 declined by 3.6% to 6,314 units from 6,547 transactions. It also dropped by 22.5% q-o-q from 8,142 units in 3Q2024.
According to Sun, this decrease in HDB resale transactions can be attributed to the more than 8,500 new flats launched by HDB in the October Build-to-Order (BTO) exercise, including many units in prime and desirable locations. Sun noted that these flats’ attractive features, such as scenic views and proximity to MRT stations, diverted demand from the resale market to the BTO market.
The research and content head at PropNex, Wong Siew Ying, also highlighted the impact of seasonal factors on sales. She noted that sales typically slow down during the year-end school holidays when many Singaporeans travel abroad. As a result, house viewings and sales activities tend to decrease during this time.
However, Wong also noted that the slower pace of price growth seen in 4Q2024 can be attributed to government intervention in August 2024. During this period, the loan-to-value (LTV) limit for HDB loans was reduced by five percentage points to 75%. According to Wong, the weaker sales and slower growth in the HDB resale price index in 4Q2024 indicate that the August 2024 measures are likely starting to take effect. The thinner resale volume during the quarter may have also contributed to the slower pace of price growth.
Resale volume in 2024 exceeds the previous year
Despite the decline in resale transactions in 4Q2024, the total resale volume for the entire year of 2024 was 28,876 units, an 8% increase from the 26,735 units seen in 2023 and the 27,896 units in 2022. However, it is still lower than the peak of 31,017 units seen in 2021.
(Source: PropNex Research, data.gov.sg*)
Decline in million-dollar flat transactions in 4Q2024
The decrease in resale transactions in 4Q2024 also resulted in a drop in million-dollar flat transactions, with just 283 units being sold compared to 331 units in 3Q2024. Despite this decline, 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, according to Sun from OrangeTee.
Toa Payoh town had the highest number of million-dollar resale flat deals in 4Q2024, with 58 transactions. Out of these, 20 were for four- and five-room units at Alkaff Vista in Bidadari Park Drive, which recently completed the five-year minimum occupation period (MOP).
“The new classification of Plus and Prime classification BTO flats may have driven more homebuyers to seek out HDB resale homes in central locations,” according to Eugene Lim, key executive officer at ERA Singapore. Lim explains that these buyers are not willing to accept resale restrictions, such as a 10-year MOP, rental restrictions after MOP, subsidy clawback upon resale, and a resale income cap on future buyers.
HDB resale prices expected to continue rising in 2025
OrangeTee predicts that HDB resale prices will continue to increase in 2025, but at a slower pace than in recent years. According to Sun, many areas have already reached new highs, causing affordability concerns for potential buyers. Additionally, the ongoing supply of BTO flats is expected to help 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 coming years.
In February 2025, HDB will launch its largest sale of balance flats (SBF) exercise, offering more than 5,500 flats across various towns, according to Lee Sze Teck, senior director of data analytics at Huttons Asia. He adds that some prospective resale flat buyers may choose to wait and try their luck in the SBF exercise.
Price growth and transaction volume expected to moderate in 2025
ERA expects resale prices to grow at a more steady pace in 2025, as the supply of flats reaching MOP decreases. This has been a key driver of price growth in recent years, according to Lim. As such, he anticipates 3% to 6% growth in HDB resale prices, with 26,000 to 27,000 units changing hands by the end of 2025.
On the other hand, PropNex anticipates a positive performance in the HDB resale market in 2025 due to healthy housing demand and fewer MOP flats entering the market. Wong projects 5% to 7% price growth in HDB resale flats, with a resale volume forecast of 29,000 to 30,000 units.
Lee from Huttons Asia notes that the supply of BTO flats in 2025 will be further reduced to 17,290 units, about 12% lower than the supply in 2024. “As there is no upfront information on the BTO projects with a shorter waiting time, buyers are likely to go to the resale market,” he says. Furthermore, with the possibility of lower interest rates in 2025, buyers can take on a larger loan amount to purchase their new home. As such, some buyers may consider executive condos (ECs) or resale condos. Lee expects the million-dollar flat market to stabilize between 900 to 1,200 units in 2025.
Huttons predicts that HDB resale flat transactions will reach 26,000 to 28,000 units, with a slower pace of price growth at 5% to 8% in 2025.