SINGAPORE -

Despite a notable drop in the volume of transactions, resale prices in Singapore's public housing market have continued to surge, highlighting a persistent demand for HDB flats. According to preliminary data from SRX and 99.co released on October 7, the resale prices for Housing and Development Board (HDB) flats rose by 1.8% in September 2024 when compared to August, even as transaction volumes fell by 14.9%.

This uptick in prices reflects what analysts term "very high" demand for resale flats, driven primarily by a limited supply. Joel Lim, a data analyst at 99.co, notes that the current market conditions mirror those from June 2024, indicating ongoing buyer interest.

Wong Siew Ying, head of research at PropNex Realty, provides further insight, stating that September marked a full year of consecutive month-to-month price increases since October 2023. The competition remains healthy among buyers, with many seeking resale flats after feeling priced out of the private condominium market.

Further breaking down the numbers, resale prices in mature estates climbed 2.3% month-on-month, while non-mature estates saw a 1% rise. Specific unit types also showed varying price growth: three- and four-room flats each increased by 2.3%, five-room units by 1.3%, and executive units by a modest 0.3%. On a year-on-year basis, resale prices soared 10% since September 2023, with four-room flats leading the charge at an 11% increase.

A total of 2,217 resale flats were transacted in September 2024. Interestingly, despite the recent decline in transaction volumes, this figure is still 11.6% higher than the same month last year. The bulk of sales comprised four-room flats at 43.1%, while executive units made up just 6.6% of the transactions.

Analysts have suggested that the recent cooling measures, which included a 5-percentage point reduction in the loan-to-value (LTV) ratio for HDB loans, may have had some impact on the transaction volume decrease. Christine Sun from OrangeTee Group anticipates a potential shift in buyer attention towards new Build-To-Order (BTO) flats being launched, especially since the upcoming sale will feature Plus flats, appealing to singles looking for housing options.

Despite these challenges, the expectations for the resale market remain robust, fortified by lower interest rates which could ease borrowing costs and foster greater purchasing power for buyers targeting higher-quality HDB flats. Mark Yip of Huttons Asia estimates that HDB resale volumes for 2024 could reach between 29,000 and 30,000 units, surpassing initial forecasts.

In a noteworthy development, the trend of million-dollar HDB flats persisted, with 106 such transactions recorded in September, slightly up from 105 in August. This segment constitutes about 4.8% of total resale activity for the month, with Kallang Whampoa leading the way with 20 units alone.

As Mr. Mak from Mogul.sg suggests, the interest in larger, higher-floor HDB resale flats priced in the $1 million to $1.5 million range reflects a compelling value proposition compared to similar-priced condominium options. With only three months left in 2024, both analysts and real estate experts predict that the number of million-dollar flats could surpass 1,000, setting a new record for the public housing resale market.

With the market dynamics continuously evolving, stakeholders are urged to stay informed as the interplay between supply, demand, and buyer sentiment could significantly influence the trajectory of HDB resale prices in the months to come.