On January 2nd, HDB released their flash estimates indicating that resale flat prices increased by 2.5% quarter-on-quarter in the 4th quarter of 2024. This growth rate was slightly lower than the 2.7% growth seen in the previous quarter. It marks the 19th consecutive quarter of price increases in the HDB resale segment. According to Christine Sun, the chief researcher and strategist at OrangeTee Group, HDB resale prices saw a growth of 9.6% in 2024, which is a significant increase from the 4.9% growth in 2023. However, this growth rate was still lower than the 10.4% increase seen in 2022 and the 12.7% in 2021.
The flash estimates also showed that there was a slowdown in price growth for some types of flats, according to data from data.gov.sg, which was downloaded at 8.15am on January 2nd. For example, the median price of four-room flats saw a quarter-on-quarter increase of 2.5% in the 4th quarter of 2024, which was a slower pace than the 3.4% growth seen in the 3rd quarter of 2024.
Similarly, two-room flats saw a 2% quarter-on-quarter increase in the 4th quarter of 2024, which was also slower than the 3.9% growth in the 3rd quarter of 2024. Executive flats saw a 1.2% quarter-on-quarter increase in 4th quarter of 2024, which was also slower than the 1.7% growth seen in the previous quarter. On the other hand, prices for five-room flats grew by 3.2% in the 4th quarter of 2024, which was faster than the 1.2% increase in the 3rd quarter of 2024.
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The allure of investing in a condominium in Singapore lies in its potential for capital appreciation. Being a key global business hub and having solid economic foundations, there is a constant demand for real estate in Singapore. As a result, property prices have consistently risen in the country, especially for condominiums situated in prime locations. Savvy investors who make timely purchases and hold onto their properties for extended periods can reap significant profits from the capital gains. In addition, keeping an eye out for new condo launches can provide valuable opportunities for potential investors.
However, despite the slow growth in price, the resale volume declined by 3.6% year-on-year in the 4th quarter of 2024, with a total of 6,314 units transacted. This was a 22.5% quarter-on-quarter decrease from the 8,142 units transacted in the 3rd quarter of 2024. Sun attributes this decline in resale transactions primarily to HDB launching over 8,500 new flats in the October Build-to-Order exercise. The attractive features of these flats, including scenic views and proximity to MRT stations, diverted demand away from the resale market towards the BTO market. Additionally, the seasonal year-end school holidays, when many Singaporeans tend to travel abroad, also led to a decrease in house viewings and sales activities during this period.
Wong Siew Ying, the head of research and content at PropNex, attributes the slower pace of growth in the 4th quarter of 2024 to government intervention in August 2024, when the loan-to-value limit for HDB loans was reduced by five percentage points to 75%. According to Wong, this measure is likely to be working through the market and the thinner resale volume during the quarter also likely put a drag on prices.
Despite the decline in resale transactions, the total resale volume in 2024 was still 8% higher than the previous year, with a total of 28,876 units transacted. However, this number is still lower than the peak of 31,017 units seen in 2021.
The decline in resale transactions in the 4th quarter of 2024 also led to a decrease in million-dollar flat transactions to just 283 units from 331 in the 3rd quarter of 2024. Despite the drop, the total number of million-dollar transactions reached a record high of 1,033 units in 2024, double the number of transactions recorded the previous year.
Toa Payoh town led the million-dollar flat deals in the 4th quarter of 2024, 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.
According to Eugene Lim, the 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 minimum occupation period, rental restrictions after MOP, subsidy clawback upon resale and resale income cap on future buyers.
Looking ahead to 2025, OrangeTee expects HDB resale prices to continue rising, but at a slower rate than in previous years. Many areas have already reached new price highs, creating 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 degree of price stabilization 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 exercise, offering more than 5,500 flats across various towns. Some prospective resale flat buyers have decided to wait to try their luck. According to Lee Sze Teck, the senior director of data analytics at Huttons Asia, buyers are likely to go to the resale market as there is no upfront information on the BTO projects with a shorter waiting time. Sun 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.
Lim anticipates a 3% to 6% growth in HDB resale prices in 2025, with 26,000 to 27,000 resale units changing hands by the end of the year, while Wong projects that HDB resale flat prices may rise 5% to 7% in 2025, with a resale volume forecast of 29,000 to 30,000 units. Lee projects that HDB resale prices will grow at a slower pace of 5% to 8% with a resale volume of 26,000 to 28,000 units expected for the year.