HDB Resale Prices Surge 9.6% in 2024

SINGAPORE – The market for Housing and Development Board (HDB) resale flats saw prices soar by 9.6% in 2024, significantly higher than the previous year's 4.9% increase. This upward trajectory has persisted quarterly since the second quarter of 2020, marking a strong recovery for the public housing sector. However, just as optimism was building, the last three months of 2024 revealed a slowdown in momentum, with prices climbing only 2.5%, down from 2.7% in the third quarter, according to preliminary figures from HDB released on January 2.

Transaction Volume Affected

In the fourth quarter, the number of resale transactions dropped sharply, declining by 22.5% to approximately 6,314 units, down from 8,142 units in the preceding quarter. Analysts attribute this decrease to a shift in buyer interest toward the Build-To-Order (BTO) market, evidenced by the launch of over 8,500 new flats in various towns including Ang Mo Kio and Bedok in October.

Overall Market Resilience

In total, 28,876 resale flats exchanged hands throughout 2024, an 8% increase from the 26,735 flats sold in 2023. This suggests a resilient demand despite the recent cooling off in the market.

Price Growth Deceleration

Christine Sun, chief researcher and strategist at OrangeTee Group, noted a deceleration in price growth for various flat types, particularly between October and December, contributing to the overall slowdown. For example, the median price of four-room flats rose by 2.5%, compared to a more vigorous 3.4% previously.

Five-Room Flats Trend

Interestingly, five-room flats diverged from this trend, witnessing a robust 3.2% increase, up from just 1.2% in the last quarter. Eugene Lim, CEO of ERA Singapore, commented that high mortgage rates throughout the year encouraged many flat owners to upscale within the HDB market, allowing them to seek larger, central homes with extended leases, further supporting resale prices.

Million-Dollar Flat Transactions

Moreover, a record-high number of million-dollar flat transactions marked a notable shift; approximately 1,035 flats sold for over $1 million in 2024 more than doubling last year’s 469 deals. However, this figure dipped to 285 transactions in the fourth quarter from 331 previously, reflecting cautious buyer sentiment following the cooling measures taken in August 2024 that reduced the loan-to-value limit for HDB loans from 80% to 75%.

Cautious Buyer Sentiment

Mohan Sandrasegeran, head of research at Singapore Realtors Inc., emphasized that these measures have pushed many potential buyers to adopt a more conservative approach, considering affordability and long-term market implications. Additionally, Lee Sze Teck from Huttons Asia pointed out that most of the million-dollar flat transactions occurred in sought-after estates like Toa Payoh, which alone logged 55 deals in Q4 2024.

Government Policies and Future Outlook

The HDB has attributed the increase in resale prices and volume to sustained demand and a tightening supply. With the government’s policy adjustments aimed at fostering a stable property market, it urges prospective buyers to exercise financial prudence, especially as the market can shift through cycles.

New Flat Launches

To keep pace with demand, the HDB launched a total of 21,225 new flats in 2024, incorporating 19,637 BTO flats and 1,588 Sale of Balance Flats. Looking ahead, an additional 5,000 BTO flats will be made available in February across various locations, alongside over 5,500 balance flats in what is set to be the largest offering of this type to date.

Conclusion

As the HDB continues to navigate this dynamic property landscape, potential buyers and sellers are keenly watching for trends that may impact their investment decisions. Will the market stabilize or see another wave of growth? Only time will tell!